Pakistan’s Stock Market Ranks As The Second Best In World

The passage discusses the recent rise in Pakistan’s primary stock index to a six-year high, driven by hopes that the strengthening rupee will help alleviate inflationary pressures. The KSE-100 Index increased by 0.9% to reach 50,673.04, marking a 10% month-to-month gain, making it the second-best performer among over 90 global equity indexes tracked by Bloomberg. Despite this growth, the gauge still maintains a relatively low price-to-earnings ratio for the next year, standing at 3.2 compared to 8.8 for the MSCI Frontier Markets.

Faisal Bilwani, head of international sales at Alfalah CLSA Securities Pvt., anticipates that the recovery of the Pakistani rupee, indications of stabilization in the secondary debt market, and inflation trends will attract fresh investments into equities. He believes the market will continue to gain attention now that the KSE-100 has surpassed the 50,000 milestone after six years.

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However, Pakistan’s economy faces challenges, including high inflation, hovering around 30%, due to energy price hikes demanded by the IMF. The recent surge in global oil prices may also impact the stock market’s current rise. For the rally to persist into 2024, national elections anticipated for late January and the successful completion of a new IMF program are seen as crucial factors in attracting investors. Adnan Khan, head of foreign sales at Intermarket Securities Ltd., remains optimistic, citing low valuations and the potential for a successful IMF review to drive Pakistan’s equities to new highs.