KARACHI – Pakistan’s stock market is witnessing a worrying trend as more companies increasingly opt out of the Pakistan Stock Exchange (PSX), signaling deeper structural challenges within the country’s corporate and regulatory environment. A marked rise in voluntary delistings reflects shifting priorities among businesses — and growing concerns among investors.
The trend began gaining momentum after the removal of tax incentives that once made public listing financially attractive. In earlier decades, listed companies enjoyed a notable 5% tax advantage, but with that benefit gone, many firms — especially family-owned enterprises — have chosen to return to private structures and shrink their public shareholding.
Experts note that being listed comes with higher regulatory and financial transparency requirements, including stricter disclosures and potential tax scrutiny. For many businesses, delisting means operating with fewer reporting obligations and more operational freedom — a tradeoff they are increasingly willing to make.
Multinational companies also face complex transfer pricing issues while listed, making private ownership more convenient for shifting profits, managing margins, and maintaining internal global cost structures. In Pakistan’s business landscape, where family-controlled operations remain dominant, going private helps retain control over decision-making, succession, and wealth distribution without shareholder pressure.
Companies also cite weak liquidity as another major factor. Many stocks on the PSX trade at extremely low daily volumes, leaving the market unattractive for firms seeking active investor participation. The situation is compounded when loss-making firms, such as Pak Suzuki and others in recent years, determine that staying on the exchange offers limited benefit.
The growing number of delistings poses questions about the long-term vitality of Pakistan’s capital markets. With fewer companies remaining publicly tradable, investor confidence, competition, and share price transparency may weaken, reducing the overall appeal of the PSX as a thriving investment hub.
This story has been reported by PakTribune. All rights reserved.