Karachi, June 30, 2025 – The Pakistan Stock Exchange (PSX) has delivered a jaw-dropping performance in fiscal year 2024-25, as the benchmark KSE-100 index skyrocketed by an unprecedented 60% in local currency terms.
Even in US dollar terms, the index surged 57%, making it the eighth-best performing stock market globally this year — and the number one over the past two years.
According to a powerful research note by Topline Securities, the KSE-100 index has now delivered a jaw-dropping 203% return in PKR and 206% in USD over FY24 and FY25 combined. This explosive rally underscores a massive turnaround in investor sentiment, fueled by Pakistan’s return to macroeconomic stability, anchored by the ongoing IMF program.
Key catalysts driving this supercharged rally include:
• Completion of the first IMF review in March 2025
• A historic interest rate cut from 20.5% to 11%
• A credit rating upgrade by Fitch from CCC+ to B-
• Improving macroeconomic indicators
• Surging market liquidity as investors shift from fixed income to equities
Trading activity has been equally vibrant. The average daily volume in the cash market rose 37% year-on-year to 631 million shares/day, while average traded value jumped 80% to Rs28 billion/day. Futures trading also exploded, with volumes climbing 26% to 196 million shares/day and value increasing 60% to Rs10.1 billion/day.
Despite foreign corporates turning net sellers of US$321 million in FY25 — largely due to FTSE rebalancing — local institutional support remained strong. Mutual funds led the charge with net buying of US$227 million, followed by companies and individuals.
Several standout stocks in the KSE-100 index massively outperformed the broader market. Bannu Woollen Mills soared 226%, National Bank of Pakistan rocketed 214%, and GlaxoSmithKline Pakistan climbed 179%. Top-performing sectors included Vanaspati, Jute, and Woolen.
Looking ahead to FY26, the outlook remains bullish. Topline forecasts the KSE-100 index could hit 160,000 points by June 2026 — a projected return of 29%, driven by multiple expansion, earnings growth, and dividend yields. However, key risks and triggers include:
• IMF review outcomes and potential expenditure cuts
• Expected credit rating upgrade and launch of Eurobonds and Sukuks
• Geopolitical shifts in Pakistan-USA ties and Middle East tensions
• Oil price volatility, with Brent already breaching US$75/bbl again
• Privatization of PIA, DISCOs, Reko Diq, and other state assets
• FX reserves stability, expected to rise to US$17.7 billion by FY26
Pakistan’s market is trading at a compelling forward PE of 5.7x, well below its historical average of 7.0x. Analysts believe this undervaluation offers a rare opportunity for long-term investors.
With strong macro backing, fresh liquidity, and reform momentum, the KSE-100 index is not just riding a bull wave — it’s leading a market revolution.