The Pakistan Stock Exchange has achieved a tremendous performance, and a new milestone achieved. It goes inseparably with very healthy foreign investment and an upbeat economic indicator to the eradication of investor confidence.
The benchmark of the PSX, the KSE-100 Index, closed at an all-time high by gaining 1.1 percent to finish at 81,459 points, while in intraday trading it reached an all-time high of 81,865 points. The increase has ensconced the Pakistan Stock Exchange as the world’s best-performing stock market with a rise of 30 percent this year.
Foreign Investors Invest $87M in Pakistan Stocks
Foreign investors poured a record $87 million into Pakistani shares in 2024, the highest foreign investment in more than a decade since 2014. This rise in the stock market is propelled by an inflow of foreign capital and an improvement in the economy of Pakistan.
As stated by Bloomberg, PSX is performing well mainly because of its superior economic fundamentals and an increase in foreign participation. The reasons that supported market growth despite the pandemic were improving the balance account of Pakistan and a decision by the central bank to lower the rate of interest. The central bank sustained inflation, cut rates, and attracted more investors accordingly.
FTSE Reclassifies Pakistan, Bolstering Investment Potential
In July, FTSE Russell changed the classification for Pakistan from secondary emerging markets to frontier markets; the actual adjustment of which is targeted to be in execution on September 23rd. The challenge is there, but on the other hand, such re-classification indicates the increasing potential of Pakistan from the global investment perspective, thus it draws more and more attention among international investors.
Bloomberg also mentioned growth prospects in fertilizers and energy, key industries, which also means that there is more room for expansion in the market. Vanguard Group Inc., one of the world’s largest investment firms, currently holds $160 million of Pakistani stocks and is likely to increase the rate of their holdings as the market continues to improve.
Bright Future for Pakistan: An Emerging Investment Hub
One of the most valid businessmen, Aqeel Karim Dhedhi, remains optimistic about the future of Pakistan as a destination for foreign investment. He said that, besides remaining global markets, the stock market in Pakistan stands at relatively cheap valuations. Furthermore, impending rate cuts by the US Federal Reserve may lead to higher inflows in the foreign securities exchanges, and Pakistan would be one of the most beneficial places for investors who are seeking high growth in emerging markets.
Aqeel Karim Dhedhi said the structural reforms and improvement in the business climate are making Pakistan increasingly attractive to international investors.
“As the global economy shifts, Pakistan offers cost-effective advantages and also makes a very good growth case,” he said, predicting that the upward movement of the market would have a spillover effect on next year.
New Milestone Achieved By Pakistan Stock Exchange
The report, while mentioning challenges like external debt and fiscal deficits, finishes on a positive note for PSX. PSX will probably score better globally with a gradual rise in foreign investment and improvement in local economic fundamentals.
At one stage on Friday, the Pakistan Stock Exchange saw a turnaround rally when the KSE-100 Index added 698.03 points, up 0.86%, to 82,157.31 during intra-day trading. This was the highest ever the country’s key index had reached, as prospective investors slowly began to grow in confidence regarding the country’s economic recovery.
The benchmark Pakistan Stock Exchange index once touched the intraday high of 82,372.19 points and a low of 81,387.57 points. Overall, volumes improved as 81.8 million shares, valued at Rs7.7 billion, changed hands.
The Pakistan Stock Exchange index had rallied over 1,500 points the prior day after Pakistan recorded a current account surplus of $75 million for August 2024. It also carried forward the momentum from an increase in foreign direct investment to $214 million for August from $136 million the month earlier.
Market Gains on Strength in Sectors and Positive Indicators
The across-the-board strong buying catapulted the Pakistan Stock Exchange index up to an intraday high of 82,003.58 points.
It, however, fell to 80,680.24 points owing to mid-day profit-taking and closed at 81,459.29 points after gaining 997.95 points or 1.24 percent. Key sectors attracted higher interest, including fertilizers, banking, and oil and gas development.
Collectively, Fauji Fertiliser, Engro Fertilizers, Meezan Bank, MCB Bank, and Oil and Gas Development Company contributed 690 points to the index.
Ahsan Mehanti, the Managing Director of Arif Habib Corp attributed the rally in global markets and positive economic data as evidenced by the current account surplus, to a surge in bullish sentiment.
Expectations of an IMF $7 billion Extended Fund Facility approval, besides rising crude oil prices also supported market gains.
KSE-100 Hits 82,000 as Fertilizers Lead Gains
Topline Securities said the KSE-100 index was closing in on 82,000 points for the first time on the back of upbeat key economic indicators and expectations of a state bank’s rate cut.
Meanwhile, Arif Habib Limited pointed out that once the Pakistan Stock Exchange index pierced above 82,000 points intra-day at the back of a more-than-expected US Federal Reserve interest rate cutback, it triggered a global risk-on rally.
Of the total stocks traded, 61 advanced while 36 declined. Best performers included Fauji Fertiliser (+5.17%), Engro Fertilizers (+5.4%), and Meezan Bank (+3.61%). Meanwhile, the top decliners included Mari Petroleum (-1.92%), TRG Pakistan (-7.68%), and Service Industries Limited (-2.11%).