PTBP Web Desk
The Pakistan Stock Exchange (PSX) commenced the week on a bullish note, with the benchmark KSE-100 Index making significant gains during intra-day trading on Monday. At 2:45 p.m., the index was recorded at 114,650.31 points, reflecting an impressive increase of 3,299.14 points or 2.96%.
This rally marked a continuation of the positive momentum seen in recent weeks, fueled by across-the-board buying in key sectors. Prominent contributors to this surge included automobile assemblers, cement, chemicals, commercial banks, fertilizers, oil and gas exploration companies, oil marketing companies (OMCs), and power generation stocks.
Index-heavy stocks such as HUBCO, OGDC, MARI, PPL, POL, PSO, SNGPL, HBL, NBP, and MCB were observed trading in the green, showcasing robust investor confidence across diverse industries.
According to a recent report by Topline Securities, the Pakistan Stock Exchange has outshined all other domestic asset classes in 2024. The KSE-100 Index recorded an impressive 78% increase during the year, making it the second-best-performing stock market globally, surpassed only by Argentina.
The report highlighted the remarkable 18-month performance of the PSX, which delivered a 177% return in USD terms (169% in PKR). This stellar performance has been attributed to macroeconomic stabilization and substantial improvements in Pakistan’s external accounts.
Despite this rally, the PSX’s market capitalization remains at $50 billion—half of its 2017 peak of $100 billion. Factors contributing to this decline include the depreciation of the Pakistani rupee (PKR), large dividend payouts, and fewer stock market listings.
Last week, the PSX concluded on a strong note, buoyed by fresh buying at attractive valuation levels. The KSE-100 Index surged by 1,838.03 points on a week-on-week basis, closing at 111,351.18 points. This consistent upward trend underscores the growing investor optimism in the market, driven by favorable macroeconomic indicators and improved liquidity.
While the PSX demonstrated exceptional performance, global equity markets exhibited mixed trends on Monday.
Asian shares edged lower as high US Treasury yields weighed on Wall Street valuations and supported the US dollar at multi-month peaks. Trading volumes were light, with the New Year holiday approaching and a relatively sparse economic data calendar for the week.
The MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2%, although it remains 16% higher for the year. Japan’s Nikkei experienced a 0.2% decline but has posted gains of 20% for 2024.
In contrast, South Korea’s main index has faced headwinds, primarily due to political uncertainties. It has incurred losses exceeding 9% for the year, with a further decline of 0.35% on Monday.
Meanwhile, US markets showed subdued activity, with S&P 500 and Nasdaq futures down 0.1%. Wall Street ended last week with a broad-based sell-off, despite the absence of a clear trigger.
Several factors have contributed to the PSX’s stellar performance:
- Macroeconomic Stabilization: Improvements in Pakistan’s external accounts and a better fiscal outlook have bolstered investor confidence.
- Sectoral Growth: Key sectors such as banking, oil and gas, and power generation have shown resilience, driving the index upward.
- Global Trends: While global markets face mixed sentiments, Pakistan’s stock market has benefitted from low valuations and attractive returns.
As 2024 comes to a close, the PSX is well-positioned for sustained growth, provided macroeconomic stability persists. However, challenges such as currency devaluation and limited new listings remain.
Globally, markets are likely to remain influenced by developments in the US and China, with economic indicators such as the PMI factory surveys and the US ISM survey for December expected to provide further direction.
For Pakistan, continued reforms and supportive policies will be critical in maintaining investor confidence and driving long-term growth in the stock market.
