The integration of the Pakistani equity market with international equity markets: an investigation

This paper investigates the integration of the equity market in Pakistan with those in other countries. In this context, seven major equity markets, that is, the markets of USA, UK, France, Germany, Japan, Hong Kong, and Singapore were selected for the analysis. The integration was examined through co-integration analysis using weekly country indices from January 1988 to December 1993. The analysis provides little evidence of integration of the Pakistani market with international markets. The low level of integration qualifies the Pakistani market as an attractive diversification tool for international portfolio managers.