KSE-100 index leads as Asia’s best-performing market

Despite prevailing economic crises, Pakistan's stock market has shown resilience by emerging as the best-performing market in Asia in 2024, according to Bloomberg.

The KSE-100 index reflected a 27% increase in dollar terms this year, with experts anticipating further gains.

Strategists attribute the market's strong performance to its cheap valuations, high positive real rates, and a fairly valued currency.

The recently proposed budget, aimed at securing a new loan from the International Monetary Fund (IMF), has also bolstered investor confidence.

Topline Securities Ltd and Arif Habib Ltd predict the KSE-100 index could see an additional 10% increase by the year's end.

Despite the economic challenges, foreign buying and other factors are expected to drive the market's momentum.

Ali Hussain, Head of Research at Dubai-based Frontier Investment Management Partners Ltd, commented: "There's a lot of juice left in this rally. Cheap valuations, high positive real rates, and a fairly valued currency make a very attractive case right now."

The KSE-100 index has remained attractive with a one-year forward earning-based valuation of 3.8 times, representing a 50% discount to its lifetime average.

Islamabad has increased taxes on industries like cement, automobile, and steel to meet the IMF's guidelines, crucial for fulfilling the $24 billion debt payments due in the next fiscal year.

Bloomberg Economics noted the political stability despite concerns that the coalition government could be at risk if the Pakistan Peoples Party (PPP) withdraws due to public pressure.

Investors remain hopeful, with Arif Habib Ltd predicting that foreign buying, earnings growth, and robust local liquidity will sustain the market's momentum over the next few years.

Bilal Khan, Head of Institutional Equity Sales at Arif Habib Ltd, stated: "With the new IMF programme spanning the next three years, we anticipate a favourable external position, supporting continued bullish market sentiment."