KARACHI: The Pakistan Stock Exchange (PSX) has become a prominent symbol of economic stabilisation, reaching an all-time high and being recognised as one of the best-performing markets globally during the outgoing fiscal year.
According to the Economic Survey 2024-25, released by Finance Minister Muhammad Aurangzeb on Monday, the equity market registered a significant growth of 50.2pc from 78,445 to 117,807 points during the July-March period.
During the period under review, the index closed at its highest level of 118,770 points on March 20, while the lowest level was observed at 77,084 points on Aug 5, 2024.
However, the benchmark index surged by 54.3pc to a record 121,641 points as of June 5 from 78,824.33 on July 2, 2024 and the market capitalisation rose 41.8pc to Rs14,729bn from 10,432.69.
The unprecedented performance of the index can be attributed to robust corporate earnings, declining interest rates amid a sharp deceleration in inflation to single digits, the successful first IMF Extended Fund Facility programme review and subsequent disbursement of the tranche, and a stable macroeconomic environment, which boosted investors’ confidence.
The average daily volume surged to 828 million shares compared to 621m shares witnessed during FY24. As of March 31, the number of listed companies stood at 527, with total listed capital of Rs1,727bn and market capitalisation of Rs14,374bn. Total funds mobilised between July and March FY25 in the PSX amounted to Rs9,740.6m, which comprises Rs8,991m of capital of new listing, while the debt issued stood at Rs750m.
Around $242m worth of securities were offloaded by foreign investors, which were absorbed by domestic investors. PSX’s market capitalisation was recorded at Rs10,375bn ($37.3bn) on June 30, 2024. It closed at Rs14,374bn ($51.30bn) on March 31, reflecting an increase of 38.5pc (Rs4,000bn) in the period under review.
Commercial banks dominate overall market capitalisation with a share of 18.7pc followed by oil and gas exploration companies with 17.4pc, food and personal care products with 9.2pct, cement 8.3pc and fertiliser 7.2pc. These five sectors account for 60.8pc of the total market capitalisation.
Best performing market
According to Bloomberg, PSX ranked among the top-performing equity markets globally in CY2024, recording a remarkable 30pc growth in foreign investment, the highest over a decade. The KSE-100 index surged by 85pc in rupee terms and 87pc in dollar terms. The exceptional performance was attributed to the influx of foreign capital, catalysed by a series of positive domestic economic developments.
Among the strongest-performing sectors were pharmaceuticals, jute, and transport, with key sectors such as fertilisers and energy demonstrating substantial growth potential.
Despite the record-high performance, the PSX remained one of the most undervalued markets in Asia, continuing to trade at a significant discount relative to regional peers. With a one-year forward price-to-earnings (P/E) ratio of around 6.0x, the market was valued at approximately 50pc below its long-term historical average. This compelling valuation, combined with improving macroeconomic indicators, reinforced the case for further significant upside potential.
Published in Dawn, June 10th, 2025
