KARACHI: The Pakistan Stock Exchange (PSX) achieved a major milestone on Thursday, surging by over 900 points to cross the 100,000 mark for the first time in history
Experts attributed the historic milestone to a combination of factors, with the government’s commitment to implementing key reforms standing out as a major driver
The KSE-100 Index’s historic milestone shows a 60% year-to-date gain driven by a mix of 47% capital gains and 13% dividend yield, a private television reported.
Main contributing sectors include fertilisers, commercial banks, and oil and gas exploration, while top stocks like Fauji Fertilizer and United Bank Ltd played a key role, according to local media.
Driving Factors behind the historical milestone
Arif Habib, a leading market expert, attributed the historical surge to economic improvements, saying that the stock market’s confidence has increased because of lower interest rates, increasing exports, and growing foreign exchange reserves.
Muhammad Sohail, CEO of Topline Securities said that that faster-than-expected decline in inflation and interest rates also added cash liquidity to the market.
Arif Habib acknowledged the challenge of political disorder but emphasised its limited impact, adding political instability has always existed in the country, Geo News reported.
He suggested that for sustainable growth, the government must strategise on how to increase its revenue.
Consistency in IMF Programme
Some experts said that the new trend suggests that Pakistan’s economy is improving with each passing day, adding several factors including consistency in International Monetary Fund (IMF) Programme have positive impact over the South Asian country’s stock market.
Samiullah Tariq, the chief of research at Pak-Kuwait Investment Company was of the view that a fall in yields and lower inflation expectations are also driving the country’s market, a local TV reported.
Tariq said that a main factor driving the market’s upward momentum was the government’s consistent adherence to the IMF programme.
The analyst further said that expectations of increased mutual fund investments in equities contributed to the index’s rise.
Resilience
Muhammad Sohail said that this is an unprecedented example in the history of the country and international capital markets where a nation on the verge of challenges has recovered so strongly.
He said that Pakistan’s stock market has consistently delivered a 20% annual return over the last 25 years, highlighting its potential for sustained growth.
He further that new International Monetary Fund (IMF) loan coupled with financial and monetary discipline improving investors sentiments, Dawn news reported.
Political Stability
Many experts said that political stability always plays a key role in the economic stability of a country.
Talking to a local television, expert Ahsan Mehnti said that easing political noise and rupee stability played a major role in a new record in Pakistan Stock Exchange.
Pakistan PM Congratulates Nation on Milestone
Pakistan’s Prime Minister Shehbaz Sharif felicitated the nation on the KSE-100 Index crossing the 100,000 milestone for the first time, state-run Radio Pakistan reported.
The PM said this “remarkable achievement shows the trust of business community and investors in government’s policies”.
He claimed the government’s economic team and officials are working tirelessly to promote investment in the South Asian country deserve appreciation for achieving this landmark.
The PM pledged to take every possible step for the economic stability and development of the nation, saying that they sacrificed their politics to save the country from default.
“By the grace of God Almighty, the sacrifice has not gone in vain,” he said, saying that as soon as the “anarchist group left, the positive trend returned to the stock exchange”.
