Pakistan Stock Exchange tops global markets in 2024: Bloomberg report

PSX saw record foreign buying in 2024, with its benchmark KSE-100 Index having risen by 30% this year.

The Pakistan Stock Exchange (PSX) has been recognised as the world’s best-performing stock market in 2024, according to a report by Bloomberg.

The report attributed the PSX’s exceptional performance to significant foreign investment and positive economic indicators that have bolstered investor confidence.

The PSX’s benchmark KSE-100 Index reached an all-time high, closing at 81,459 points after a 1.1% increase, with intraday trading hitting a record 81,865 points.

This marked the highest level of foreign investment in over a decade, contributing to the PSX’s remarkable 30% growth this year, positioning it as the top-performing market globally.

Foreign investors purchased $87 million worth of Pakistani shares in 2024, the highest level since 2014.

This influx of foreign capital, combined with positive domestic economic developments, has driven the stock market to new heights.

According to Bloomberg, the strong performance of the PSX is largely due to improved economic fundamentals and an increase in foreign participation.

The report also noted that the recent improvements in Pakistan’s current account balance and the central bank's decision to reduce interest rates have been key factors in supporting market growth.

Inflation, which had been a concern in recent years, appears to be under control, allowing the central bank to make these rate adjustments, further attracting investment.

In July, Pakistan was reclassified by the FTSE Russell from a secondary emerging market to a frontier market, a change that will take effect on 23 September.

While this reclassification may present some challenges, it also reflects Pakistan’s growing potential in the global investment landscape.

The reclassification is expected to draw further attention from global investors, who see opportunities in the country’s market.

The Bloomberg report also highlighted growth potential in key sectors such as fertilisers and energy, indicating that Pakistan has room for further market expansion.

Vanguard Group Inc., one of the world's largest investment firms, currently holds $160 million worth of Pakistani stocks and is expected to increase its holdings as the market continues to show promise.

Prominent business leader Aqeel Karim Dhedhi expressed optimism about the future of foreign investment in Pakistan, pointing out that the country’s stock market remains relatively inexpensive compared to other global markets.

He also highlighted that the expected rate cuts by the US Federal Reserve could drive further foreign inflows, making Pakistan an attractive destination for investors looking for growth in emerging markets.

Aqeel Karim Dhedhi added that Pakistan’s ongoing structural reforms and focus on improving the business environment have positioned it as an increasingly appealing market for international investors.

"As the global economy shifts, Pakistan offers competitive advantages in terms of cost and growth potential," he said, adding that the market’s upward trajectory will likely continue through the coming year.

The report concluded that despite certain economic challenges, including Pakistan’s external debt and fiscal deficits, the overall outlook for the PSX remains positive.

The steady rise in foreign investment and improvements in economic fundamentals suggest that Pakistan’s stock market will continue to perform strongly on the global stage.

The Pakistan Stock Exchange (PSX) saw an impressive rally on Friday, with the benchmark KSE-100 Index rising by 698.03 points, or 0.86%, at 82,157.31 points during intra-day trading.

This surge marked a new high for the index, further reflecting positive market sentiment and investor confidence in Pakistan's economic recovery.

The index reached an intraday high of 82,372.19 points, while the lowest point during the trading session was 81,387.57 points.

Total of 81.8 million shares were traded, with a cumulative value of Rs7.7 billion, highlighting robust trading activity.

Yesterday, the KSE-100 index, PSX's benchmark, surged by nearly 1,500 points as Pakistan posted a current account surplus of $75 million for August 2024.

This momentum was further bolstered by a rise in net foreign direct investment, which climbed to $214 million in August, up from $136 million in July.

The index hit an intra-day high of 82,003.58 points in early trading, reflecting strong buying activity across sectors. However, mid-day profit-taking saw it dip to a low of 80,680.24 points, before closing at 81,459.29, gaining 997.95 points, or 1.24%.

Key sectors such as fertilisers, banking, and oil and gas development attracted notable interest. Companies like Fauji Fertiliser, Engro Fertilizers, Meezan Bank, MCB Bank, and Oil and Gas Development Company collectively added 690 points to the index.

Ahsan Mehanti, Managing Director of Arif Habib Corp, cited a rally in global equities and positive economic data, including the current account surplus, as key drivers of the bullish sentiment.

Expectations of an International Monetary Fund (IMF) $7 billion Extended Fund Facility (EFF) approval and rising crude oil prices further supported the market's gains.

Topline Securities reported that the KSE-100 index was nearing the 82,000-point level for the first time, fuelled by positive economic indicators and hopes of lower interest rates.

Arif Habib Limited (AHL) also noted that the index broke past 82,000 points during intra-day trading, helped by a larger-than-expected US Federal Reserve rate cut, which sparked a global rally in risk assets.

Of the stocks traded, 61 advanced and 36 declined. Major gainers included Fauji Fertiliser (+5.17%), Engro Fertilizers (+5.4%), and Meezan Bank (+3.61%). Mari Petroleum (-1.92%), TRG Pakistan (-7.68%), and Service Industries Limited (-2.11%) were the top decliners.