How Strong is the Evidence of the Weak Form of Efficient Market Hypothesis-EMH?

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Market efficiency plays a critical role in the success of investment decisions made by individual and institutional investors. Pakistan Stock Exchange is a modern market with several characteristics of a developed market. Considering the significance of EMH for investors and other stakeholders, this study aims to test the weak form of EMH in the Pakistan stock exchange using daily data for 2018-2023. This study employs unit root test, autocorrelation, and run test to test the efficient market hypothesis. The study's findings indicate that index returns do not follow a random walk; therefore, PSX for the selected period is inefficient. Based on the study's findings, it can be inferred that returns at PSX are predictable based on historical information. The study has implications for various stakeholders.