Share Market News / Pakistan's stock market is setting record after record, what is the reason?

Share Market News: Pakistan Stock Exchange (PSX) created history on Thursday as the KSE-100 index crossed the magical figure of 100,000. Pakistan has achieved this feat before India, where the Indian market has still not reached the figure of 90,000. This achievement has made Pakistan the center of discussion in the global stock market.

On Thursday, the KSE-100 index registered a gain of 947.32 points (0.95%) and jumped from the previous close of 99,269.25 to reach 100,216.57. At the end of the day, it closed at 100,082.77 with a gain of 813.52 points (0.82%). This historic jump has come despite the recent political uncertainty in Pakistan, which had destabilized the market for some time.

Indian market falls, Pakistan at rocket speed

When Pakistan's market set a record, the Indian market witnessed a massive decline. The Sensex closed down 1,190 points at 79,043 and the Nifty closed down 360 points at 23,914. The reason for this decline in the Indian market is being attributed to the tariff imposed by the US on China, which triggered a sell-off in Indian IT stocks. Investors feared that Indian IT companies could also be affected by this.

But the question arises that when the Indian market was falling, how did the Pakistani market reach this height?

Reasons for the rise of Pakistan market

According to Mohammad Sohail, CEO of Topline Securities, this rise has come due to the loan received from the International Monetary Fund (IMF) and fiscal discipline in Pakistan. These reforms reestablished the confidence of investors. Apart from this, the fall in inflation and interest rates boosted cash flow in the market.

Sohail said that the KSE-100 index has jumped from 40,000 to 100,000 in just 17 months. However, the market's PE ratio is still trading at 5x, which is lower than the average of 7x. This gives investors attractive opportunities in the market.

Journey of the last 25 years

In the late 1990s, the KSE-100 index was less than 1,000 points. Now it has increased 100 times to 100,000. Sohail said that in the last 25 years, the market has given an average of 20% annual return (in rupees) and 13% return (in dollars).

Expert opinion

Faran Rizvi, equity head of JS Global, described this achievement as historic and said that it is in line with their year-end target of 100,000. He said that 47% of this rally is contributed by capital gains and 13% by dividends.

Will this boom continue?

Experts believe that this boom in Pakistan's market may continue for some time, but political stability and economic policies will determine its long-term results.

Conclusion

Pakistan has created history by crossing the 100,000 mark of the KSE-100 index. This is an important milestone not only for Pakistan but also for South Asian markets. However, to maintain this boom, Pakistan will have to maintain fiscal discipline and investor confidence.