BULL MARKETS, BEARISH LIVELIHOODS: DISCONNECT BETWEEN PAKISTAN STOCK EXCHANGE GROWTH AND SOCIOECONOMIC WELL-BEING

Abstract

This study investigates the relationship between the performance of the Pakistan Stock Exchange (PSX) and the socioeconomic well-being of the population as a paradox. Despite PSE growth in indices and market capitalization in the last decade, Pakistan has been deteriorating in poverty, income disparity, and living standard. Using qualitative, exploratory, and interpretive from a political economy perspective, the study uses semi-structured interviews, policy and document reviews, and optional focus group discussions with multiple stakeholders, including retail and non-investor policymakers, economists, and representatives of labor and small and medium enterprises (SME) owners. Manually done thematic analyses with some NVivo-style coding revealed ten key themes, among which are weak public participation, elite market gain, speculative market growth, weak real economy link, macroeconomic insecurity, non-inclusive financialization, policy bias, low dividend, informal economy, and reduced public trust. The findings from this study revealed that the growth of stock markets in Pakistan primarily benefits the economic elite, that the growth is largely driven by speculative economic forces, and that the growth of stock markets in Pakistan lacks any meaningful social welfare and inclusive financial participation mechanisms. The research highlights the necessity for policies that integrate the advancement of financial markets with the reduction of poverty, equitable distribution of wealth, and inclusive economic growth.