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The function of an efficient stock market is to process information, and thereby guide capital towards its best economic use. If stock price movements in emerging economies are mainly due to either politically driven shifts in property rights or noise trading. The invisible hand in stock market allocates capital poorly, thereby retarding economic growth..Modern finance theory emphasis the role information in asset markets.Karachi stock exchange (KSE) has been termed as one of the best performing emerging market during 1990. However, like many other emerging markets KSE is considered as shallow market, plays limited role to raise the funds and a fairly volatile market. The market has experienced the booms and bursts of comparatively shorter time duration. To play a required role in mobilization of capital in the economy, many steps were taken to open the market to foreign investors as well as to attract the local players. The institutional development and reforms resulted in more disclosure of information through frequent issue of quarterly and annual report, announcement of dividends, annual general meeting and issue the daily quotation.
About the author
Dr. Khalid Mustafa did PhD Economics from University of Karachi in 2009. He has been teaching since 1986 as permanent and visiting professor in various University. He published various articles on financial markets specially stock market in local and international Journals. Now he is a chairman of economics department University of Kara.
