How to Invest in the Pakistan Stock Exchange

The Pakistan Stock Exchange (PSX), formerly known as the Karachi Stock Exchange, was created when exchanges in Karachi, Lahore and Islamabad were merged by the Pakistan government. The PSX is now the only stock exchange in Pakistan. With 546 companies listed, the exchange has a total market capitalization of approximately $50 billion.

Investing overseas can enhance your investment portfolio, but before you take such a step consider working with a financial advisor who’s familiar with global exchanges.

PSX History

The Pakistan Stock Exchange (PSX) has roots stretching back to the mid-20th century, reflecting the country’s evolving financial landscape and growing capital markets. It began as three separate exchanges (the Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange), which operated independently for decades. Each exchange played a role in facilitating local investment, attracting regional capital and helping businesses raise funds for expansion.

In 2016, these three markets merged to form the unified Pakistan Stock Exchange, a move aimed at improving efficiency, strengthening regulatory oversight and making Pakistan’s capital market more competitive internationally. The consolidation created a single, more transparent marketplace that modernized trading practices and streamlined operations. This transition also made it easier for both domestic and foreign investors to participate by centralizing listings and standardizing rules.

The PSX has since adopted advanced trading systems and governance standards designed to increase investor confidence and broaden market access. Its benchmark index, the KSE-100, tracks the performance of major companies across various sectors and serves as a key indicator of Pakistan’s economic health. As the exchange continues to develop, it remains an important engine for economic growth, providing a platform for companies to raise capital and for investors to engage with one of South Asia’s emerging markets.

How PSX Works

SmartAsset: How to Invest in the Pakistan Stock Exchange

Companies listed on the PSX are divided into two groups. The Regular or Ready market consists of all the companies listed. The small and medium enterprise market is where companies capitalized at between $150,000 and $1.2 million are traded. The small and medium enterprise market is tailored for institutions and high-net-worth individual investors.

The PSX trades weekdays. On Monday through Thursday, the market is open from 9:30 a.m. to 3:30 p.m. On Friday, the market is open from 9:15 a.m. to 4:30 p.m., with a break from noon to 2:30. Pricing on the PSX is done in Pakistan rupees (PKR). The PKR is valued at approximately 0.0061 U.S. dollars.

A convenient way for foreign investors to invest in PSX stocks is through exchange-traded funds (ETFs) that have exposure to Pakistan. The Global X MSCI Pakistan ETF targets the Pakistan economy by investing in a basket of the largest companies that trade on the PSX. Many ETFs that specialize in emerging markets also have varying degrees of exposure to PSX securities.

PSX Listing Requirements

In order to be listed on the PSX companies have to meet financial and disclosure standards. The requirements include:

Minimum paid up capital of $1.2 million
Minimum free float of at least 25% of the issued share capital
At least 5 million free float shares within a year of the approval for listing

Largest PSX Stocks

The PSX is dominated by companies originating in Pakistan. Listed companies represent 35 business sectors. The largest by market capitalization are in energy, building materials and consumer products.

Oil & Gas Development Company Limited (OGDC), oil and gas exploration
Pakistan Petroleum Limited, (PPL), oil and gas exploration
Lucky Cement Limited (LUCK), cement and building materials
Pakistan Tobacco Company Limited (PAKT), tobacco
Nestle Pakistan Limited (NESTLE), food and personal care products

Special PSX Considerations

In addition to the KSE 100 Index, the KSE All Share Index and the KSE 30 Index, the PSX has indices for investors who want to put their money only into companies that comply with shariah law. The PSX-KMI All Shares Index and KMI 30 Index track shariah-compliant companies.

Shariah law prohibits investments in tobacco, alcohol, gambling and other industries deemed to be based on vices. The shariah compliance of companies listed in the PSX KMI indices is certified by shariah scholars.

How to Trade on the PSX

Trading on the Pakistan Stock Exchange is accessible to both local and international investors, but it begins with opening an account through a licensed brokerage firm. These firms act as intermediaries, helping you complete the required documentation and set up a Central Depository Company (CDC) account, which holds your shares in electronic form. Once your account is active, you can deposit funds and work with your broker to place buy or sell orders based on your investment goals.

The PSX offers several trading options, including individual stocks, exchange-traded funds and government securities, all of which can be bought and sold during official market hours. Orders can be placed online through your broker’s trading platform or by contacting your broker directly, allowing you to choose the level of involvement and guidance you prefer.

Prices shift throughout the trading day based on supply, demand and market sentiment, so staying informed about economic trends and company news can help you make more strategic decisions.

For new investors, it’s often wise to start with a clear plan and an understanding of the risks involved. The PSX can experience volatility, and markets may move quickly in response to political or economic developments. Working with a financial advisor or a knowledgeable broker can help you navigate the market more confidently and build a portfolio that aligns with your long-term objectives.

Bottom Line

The Karachi Stock Exchange is now called the Pakistan Stock Exchange (PSX) after merging with two other Pakistan exchanges, but the major index tracking Pakistani stocks is still called the KSE 100. Foreign citizens and non-resident Pakistanis can trade on the PSX using special accounts. Investors concerned about complying with shariah law can choose from companies certified as shariah-compliant and indices tracking baskets of shariah-compliant companies.

Tips on Investing

Investors inexperienced at international investing can benefit from working with an experienced financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Since investing in non-U.S. securities can be more complicated than investing on a U.S. exchange, it’s important to keep close tabs on how much of your portfolio goes into such investments. A free, easy-to-use asset allocation calculator can be immensely helpful in keeping your investments balanced.