Highlighting the Dynamics of the Game-Changer: Empirical Evidence from Stock Markets of the Key Players

China Pakistan Economic Corredor (CPEC), a predictive game-changer, was perceived to bring favourable changes in the economy of both its players. It was claimed that a boost shall be seen in each sector of the economy especially for Pakistan. Highlighting this key assumption, this study attempts to conduct a comparative analysis of PSX and Shanghai returns for pre and post announcement of CPEC. The time-series data of the two indices i.e. PSX-100 and Shanghai Stock Exchange Composite Index (SHCOMP) is selected ranging from 4th January 2010 to 2nd January 2019. The comparative analysis of both the economy indicates significant difference t(2220.237) = 2.872, p = 0.004 before CPEC-announcement and this difference becomes insignificant post-CPEC announcement t(1654.132) = 0.315, p = 753. Whereas, individual analysis of returns of both the economies indicated a signif icant change for PSX 100 t(1038)= 2.050, p = 0.041 but for SHCOMP this change is not signif icant t(1008) =-0.697, p = 0.486. The findings of the study reflect the potentials of CPEC to bring changes in Pakistani Stock market than a mature market of China