CHINA TOPIX

Updated 9:12 AM EST, Tue, Jan 05, 2021

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Chinese Consortium Acquires 40% Stake in Pakistan Stock Exchange

Chinese Bourses to Invest in Pakistan Stock Exchange.

(Photo : Getty Images) A Chinese-led consortium will acquire a 40 percent stake in the Pakistan Stock Exchange (PSX). This will be the first time China would acquire a substantial stake in a foreign stock market.

A Chinese consortium led by China's three leading stock markets is all set to acquire 40 percent stake in the Pakistan Stock Exchange (PSX), following months of negotiations. This marks another big ticket Chinese investment in Pakistan where the Chinese government has already poured billions of dollars in massive infrastructure projects.

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The consortium included Shanghai-based China Financial Futures Exchange, the Shanghai Stock Exchange (SSE), and the Shenzhen Stock Exchange. They will collectively pick up 30 percent stake in the Pakistani stock market. 

Two other Pakistan finance companies, Pak-China Investment Company Limited and Habib Bank Limited, will pick up 5 percent each in PSX. The consortium will reportedly make a total investment of $85 million in Pakistan stock exchange.

The SSE is hoping that the investment decision will further help in enhancing the economic collaboration between the two countries. 

"This investment will help broadening economic and financial collaboration between China and Pakistan and will help implement the Belt and Road Initiative and the China-Pakistan Economic Corridor," the SSE said.

A formal ceremony to mark the investment deal will take place on Jan. 20 in Karachi, people familiar with the matter have said. The ceremony will reportedly be attended by top dignitaries representing three Chinese bourses as well as Pakistan's finance minister "Ishaq Dar."

Meanwhile, the investment in the PSX is an unprecedented move, given that this is the first time that China is acquiring substantial stake in a foreign stock market.

The PSX was formed in January 2016 after merging Pakistan's three leading stock markets - Lahore, Karachi, and Islamabad stock exchanges.

Although Pakistan's economy has been plagued by soaring debt and other incremental problems, its stock market, over the years, has surprisingly outperformed other emerging markets.        

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