The National Bank of Pakistan (NBP) and the Pakistan Stock Exchange (PSX) have agreed to allow NBP to act as a “Market Maker” for government securities traded on PSX.
Arif Usmani, President & CEO of the National Bank of Pakistan, said, “The NBP is committed to playing a role in diversifying the investor base of debt securities by tapping digital distribution channels to encourage investment and expand the debt securities market in Pakistan.”
“We are optimistic that NBP, as a market maker, can add depth to the debt market and provide liquidity, both of which are essential for an effective and vibrant market to function,” he added.
A well-developed debt market is essential for economic growth, and NBP is committed to achieving this aim, as the bank’s vision is to allow economic growth that is both sustainable and inclusive.
The market maker initiative would open up the government debt market to a much larger community of investors. It will aid capital market growth by mobilising and efficiently channelling domestic resources.
“We look forward to developing a good relationship with the Pakistan Stock Exchange and continuing to foster efforts to establish a local capital market that benefits all market participants,” he said.
Market makers play a critical role in the market’s liquidity and depth by allowing investors to buy and sell securities by constantly citing two-way rates, i.e. bid and offer prices.