BMI View: Pakistan's banking and financial services sectors are poised for significant growth in the medium- to long-term; however, this will be from a low base. The level of domestic savings, key to the development and growth of capital markets, remains low, while foreign investors will remain cautious on the market with further escalation of political and macroeconomic headwinds. Though the insurance market in Pakistan is poised for rapid growth, structural challenges will continue to hamper the market from reaching its full potential. Savings rates are low and this weakens demand for non-life and life products. Furthermore, growing investor fears over the sustained profitability of the current lending boom in the banking sector could be undermined by the government's increased debt load, elevated political risks or a rise in oil prices in the medium term. Though the PSX has ranked among the best performing stock exchanges globally, its contribution to the economy is very low. This is evident from the PSX's low market capitalisation and small number of new listings every year.