The Pakistan Stock Exchange (PSX) has initiated 2024 on a robust note, evident in the remarkable gain of 1,580 points in the KSE-100 index. This positive momentum follows the upward trajectory witnessed in 2023, where the KSE 100 Index demonstrated a significant turnaround, yielding an impressive 55% return in Rupee terms.
Several factors contribute to the buoyancy in the Pakistani stock market. A pivotal role is played by the strengthened local currency, with the Pakistani Rupee maintaining stability against the US Dollar and other currencies. Additionally, a decline in fuel prices has provided further support to economic stability. The gold rate, standing at Rs 219,200 per tola for 24-carat gold on the first trading day of 2024, reinforces this economic stability.
The turnaround in 2023 was fueled by the resumption of the IMF program and a smooth transition of power to the interim government, instilling confidence in investors. The market sustained its upward trend, reaching an unprecedented high of 66,426 in December. Foreign portfolio investment also witnessed a substantial influx throughout the year.
Looking ahead, various factors shape the market’s optimistic outlook. The performance of the energy sector, anticipated dividend payouts, and the government’s commitment to addressing circular debt contribute to positive investor sentiment. Expectations of increased institutional investment in equities, driven by prospects of monetary easing in the coming months, further add to the positive outlook.
The Central Bank’s announcement of a significant rise in foreign exchange reserves, reaching $7.8 billion in late December, serves as an additional pillar of support for market confidence. This increase is attributed to financial backing from both bilateral and multilateral sources, emphasizing external support for Pakistan’s economic stability.
In conclusion, the recent surge in the PSX builds upon the strong foundation established in 2023, reflecting economic revival and positive investor sentiment driven by factors such as currency stability, declining fuel prices, and promising government initiatives.
