Karachi, November 28, 2024 – The Pakistan Stock Exchange (PSX) achieved a historic milestone on Thursday as the benchmark KSE-100 Index soared past the 100,000-point mark for the first time. This remarkable achievement came in the wake of earlier market turbulence caused by violent protests in Islamabad.
The KSE-100 Index of PSX closed at 100,083 points, recording a gain of 814 points from the previous day’s closing at 99,269 points. The day opened on a positive note with a 1% gain, as robust buying activity across sectors propelled the index upward. While profit-taking briefly brought the index down to 99,600 points by late morning, the bullish momentum returned, and the index surged past the 100,000 level again in the afternoon session.
This remarkable recovery reflects a 60% rise in CY24 to date (CY24TD) and an extraordinary 141% increase since June 2023, according to a note by Arif Habib Limited (AHL). The KSE-100 Index has staged an impressive climb from around 40,000 points in mid-2023, buoyed by several macroeconomic and market factors.
Key drivers of the rally include exchange rate stability, the successful completion of a $3 billion Stand-By Arrangement with the International Monetary Fund (IMF), improved earnings in index-heavy sectors, and an easing of monetary policy. These factors have created a favorable environment for equity investments.
Market liquidity has also surged due to declining inflation and interest rates, which have encouraged a shift of funds from low-yield assets to equities. “The faster-than-expected drop in inflation and interest rates is adding cash liquidity to the stock market,” said Mohammed Sohail, CEO of Topline Securities. Despite the rally, the PSX remains attractively priced, trading at a price-to-earnings (PE) ratio of 5x, below the historical average of 7x.
Looking ahead, analysts remain cautiously optimistic. A further 4-5% increase in the KSE-100 Index is anticipated by the end of 2024, with projections placing the index between 104,000 and 105,000 points. However, questions persist about the rally’s sustainability as valuations approach historical norms.
The PSX’s historic performance comes on the heels of its largest-ever single-day gain on Wednesday, when the benchmark index surged by nearly 4,700 points, closing above 99,000 points for the first time. This milestone underscores the market’s resilience and optimism amid Pakistan’s evolving economic landscape.
