Jazzcash, the largest mobile wallet in Pakistan signed an MOU with KASB Securities to
offer retail investors access to the stock market and other investment products. KASB’s
KTrade is the most popular investment app in Pakistan. Pakistan’s capital markets are
still very shallow. Only 200,000 individual investors. Jazz and KASB will leverage on
fintech and target a 50x growth in the market.

Fintech revolution: There is a massive growth in fintech in Pakistan. Yesterday
the Prime Minister launched a real time micro payment gateway at the State Bank,
which will enable small payment transfers. Telco led mobile wallets, such as Jazzcash
have driven a massive increase in financial penetration. Jazzcash has 25m users (12m
active users) which makes it bigger than all the banks combined in terms of retail client
base. In our opinion the partnership between Jazzcash and KASB can drive financial
inclusion in the capital markets.


▪ Transforming a legacy sector. Pakistan’s capital market (previously Karachi Stock
Exchange) is one of the oldest in Asia. Despite being a mature market, which has
decent participation by global investors, it still lacks domestic penetration. Only 0.1%
of the population invests in stocks, which is low by even regional comparisons. In
Bangladesh 2.7m people invest in stocks, in India 32m and in Malaysia there are 2.5m
retail investors. In the US 60% of the populations owns stocks. One of the reasons for
the limited penetration was that until this week, it was not possible for investors to
open an account digitally. They had to fill paper forms and get their biometric captured
by the broker. In December, the SECP enabled digital onboarding and this week digital
onboarding solution went live. We think this change is the enabler for a massive
growth in the sector.


▪ Retail brokers growing in most markets. Post COVID, there seems to be a global
increase in the interest in investing. Robinhood in the US, XP in Brazil, SBI in Japan,
Zerodha in India, FlatexDegiro in Germany and the Netherlands, Freetrade and
eTorro in the UK, Freedom Finance in Russia and EastMoney in China have led this
growth in their respective markets. KASB’s KTrade is the most popular investment
platform in Pakistan (according to download data on Similarweb) with over 100,000
registered users. We think increase in retail investor participation can bring new
capital to market and is a positive catalyst for the equity market. As we have written
before we think technology and social impact (agriculture, healthcare, education) are
the most attractive sectors in Pakistan.