Karachi, December 31, 2024 – The KSE-100 Index, the benchmark of the Pakistan Stock Exchange (PSX), closed the year 2024 with an exceptional gain of 84% (87% in US dollar terms), marking its highest percentage return in 22 years. The last time the index delivered such a stellar performance was in 2002, with a record return of 112%.
Analysts at Topline Securities attribute the impressive rise in the KSE-100 Index to improving macroeconomic conditions under the International Monetary Fund (IMF) program. Key factors driving this performance included declining inflation, a reduction in fixed-income yields, aggressive monetary easing of 900 basis points by the central bank, improved external accounts, currency stability, and a politically stable environment.
The KSE-100 Index also witnessed a significant boost in trading activity. Daily average volumes in the ready/cash market surged 76% to an all-time high of 569 million shares, while the average traded value jumped 122% to Rs22 billion per day, the highest since 2007. In the futures market, daily traded volume and value rose by 68% and 80%, respectively, reaching 184 million shares and Rs8 billion.
Market capitalization at the PSX increased by 63% to $52 billion in 2024. However, it remains below the 2017 peak of $100 billion due to factors like rupee depreciation, high dividend payouts, and limited new listings. The market cap-to-GDP ratio improved to 12%, up from 9% in 2023, though still below the 10-year average of 16%.
The KSE-100 Index outperformed all other asset classes in Pakistan during 2024, including Pakistan Investment Bonds (+27%), Gold (+24%), Naya Pakistan Certificates (+22%), T-Bills (+21%), and even the US Dollar (+1-4%). Property investments lagged, with returns ranging between -11% and +14%.
As per Bloomberg data, the KSE-100 Index ranked as the second-best performing market globally in both US dollar and local currency terms, after Argentina.
The PSX also saw renewed investor interest, with seven IPOs raising Rs8.4 billion, the highest since 2021. Notably, the government introduced shariah-compliant bonds (sukuks), raising Rs2 trillion through 15 auctions in 2024.
While foreign investors were net sellers, offloading $89 million, local mutual funds and insurance companies emerged as significant buyers, driving the KSE-100 Index to a landmark performance.