For decades, Pakistan’s real-estate sector has been where Pakistanis with varying levels of wealth have parked or invested their savings.
While people’s nest eggs in other countries take the form of bank, retirement, and investment accounts, for the longest time, that role has been fulfilled by affidavits, allocation letters, and property deeds. There was an assumption that, at least over the long run, the price of land would go up, at least keep up with inflation, but always with the hope that it could possibly turn out to be a lottery ticket. In the years in between the purchase and sale, until a capital gain is realised, this was a bit like burying money in the ground – locking it away from productive use, often for many years.
In a country where any family can be considered fortunate to own a single home of any kind, many people spend their lives collecting ownership papers to several plots, transacting, trading, buying, and selling them in the hopes of accumulating enough value this way so that one day they may trade them in for a home of their own. However, for the last decade, land prices in Pakistan have been flat in most places.
Meanwhile, the rupee experienced two devaluations of large magnitude, going from about Rs100 per USD to about Rs280 today. Add to that the post-Covid bout of global inflation that led to higher commodity prices, which has still not been arrested. Most people who kept their savings in the form of land during this time very likely lost money in terms of purchasing power.
At the same time, since the 2008 financial crisis, there has been a lot of excitement about the meteoric growth of stock prices of several publicly listed US companies, mostly in the technology sector, for example social media, cloud computing, vaccine makers, AI frontier model developers, memory-makers, etc. With the proliferation of social media, that excitement has been very visible around the globe.
From the bottom of the financial crisis in 2009, the market saw one of the longest recoveries, ending in the Covid-induced market drop in March 2020. At the same time, the smartphone and millions of apps started making their way into people’s hands en masse. Traditional brokerages in the US dropped minimum balance requirements, reduced trading fees, or dropped them entirely to entice retail investors back into the markets.
Trading in securities also became more accessible when new rules allowed retail investors to buy fractional shares. At the same time, trading broke out of the confines of traditional, stuffy brokerages. Robinhood and Webull gamified trading, allowing a younger cohort of investors to trade from their smartphones, on the go. Then came Covid lockdowns in 2020 and 2021 and brought a retail trading boom – a 62 per cent increase in trading volume, a 3-4 time increase in people transferring funds to brokerages, etc.
In Pakistan, like the rest of the world, Millennials and Gen Z were watching these developments. For freelancers and overseas Pakistanis with foreign income sources, opening and funding an account with a broker that provides retail investors access to the US market is relatively straightforward.
For Pakistani investors seeking to invest in US stocks, the principal hurdle remains sending foreign exchange abroad (usually in USD) to fund trading accounts, which is difficult to accomplish. The real-estate market at home, the traditional investment venue, has been on life support and has offered negative real returns over the last decade. Add to that the fact that the minimum ticket price for admission can often be in the millions of rupees and that picking the wrong project or plot can lead to years of litigation, decades of delays, effectively rendering the investment a total loss.
With US stocks out of reach for most investors and high risks, high initial capital requirement and lacklustre returns in the property sector, that leaves few alternatives. Bank accounts tend to pay less than the rate of inflation, and term deposit certificates are only marginally better, but a single exchange rate shock can wipe out any gains.
The unattractiveness of available options and the growing awareness that in much of the world, small savers and retail investors keep their nest eggs in the stock market drew growing attention to the Pakistan Stock Exchange (PSX). That is reflected in the number of investor sub-accounts held by the Central Depository Company (CDC), which, according to its Annual Report 2025, more than doubled in five years from 207,700 in 2020 to 428,801 in 2025. While this is massive growth, it still constitutes only 0.2 per cent of the population. For comparison, in India, this figure is in the range of 6-7 per cent of the population.
Like in most of the rest of the world, Pakistani schools, even private ones, do not offer students any education on managing personal finances. This is where many social media content creators have stepped in. The guidance and education they dispense are always labeled as not constituting financial advice for legal liability reasons.
I have been casually watching content by various local finfluencers (financial influencers) on and off for the last few years. The depth of insights offered can vary, but after a while, it can feel like creators are just stuck in the same place, treading water and repackaging what counts as common financial wisdom: First pay off any high-interest loans, then save up at least six months of living expenses and keep them in a high-yield savings account as an emergency fund, then start contributing savings to a diverse portfolio of stocks or a mutual fund.
What I found noticeable, though, is that advice from many influencers is still stuck at mutual funds. It is only very recently that I have begun hearing mentions of Exchange Traded Funds (ETFs) although ETFs were introduced on the PSX in 2020 and have been the go-to vehicle for diversification in other markets for over 30 years.
As the next generation of Pakistani investors increasingly turns away from a decade-long underperforming real-estate sector, the shift towards equity markets is an evolution in how people (especially younger people) approach managing and building their personal wealth. While financial influencers have successfully sparked this newfound interest, the current conversation needs to mature beyond basic saving strategies and entry-level mutual funds.
A more financially literate base of retail investors, who see the stock market as more than a casino, could prove transformative and unlock capital for more productive use.
The writer (she/her) has a PhD in Education.
