Pakistan Stock Exchange Shines as ‘World’s Best Performing Market’ for Second Consecutive Week

The Pakistan Stock Exchange (PSX) has once again emerged as the “world’s best-performing market” for the second consecutive week, as reported by Arif Habib Limited. The stock index experienced remarkable growth, surpassing the 44,000-point milestone with a gain of nearly 2,800 points. This positive trend can be attributed to investors capitalizing on the recently reached agreement with the International Monetary Fund (IMF).

The week kicked off on a positive note with a significant daily gain on Monday, as investors responded favorably to the long-awaited staff-level agreement with the IMF. However, profit-taking by institutions resulted in a temporary bearish trend on Tuesday, despite a strong recovery following the IMF deal.

Wednesday witnessed a relatively flat market close, as concerns over liquidity risks and the depreciation of the Pakistani rupee weighed on investor sentiment. Nevertheless, Thursday marked a return to positive territory as investors anticipated the IMF’s approval of a $3 billion loan in its upcoming executive board meeting, generating renewed buying interest.

The final trading session remained upbeat as investors found support from Pakistan’s growing foreign currency reserves, despite the absence of significant positive catalysts. Consequently, the benchmark KSE-100 index surged by 2,755 points, culminating at 44,207 at the close of the week following the Eid festivities.

Muhammad Waqas Ghani, an analyst at JS Global, highlighted the investor enthusiasm triggered by the government’s agreement with the IMF, which bolstered market optimism. Noteworthy performances were observed in various sectors, including refineries, technology, and engineering, throughout the week.

In terms of trade figures, Pakistan witnessed a substantial reduction in the trade deficit for FY23, narrowing by 43% year-on-year to $27.5 billion. Additionally, the market responded positively to the government’s disbursement of Rs142 billion to settle dues with Independent Power Producers (IPPs).

Foreign investors displayed increased buying activity during the week, with a total investment of $4.7 million. However, local banks and DFIs, as well as companies, reported selling activities. The average trading volumes and value traded also experienced significant increases compared to the previous week.

Overall, the Pakistan Stock Exchange delivered a strong performance, solidifying its position as the world’s best performing market with a substantial weekly return. Investors remain optimistic as they continue to navigate the evolving landscape of the global economy.