Pakistani stocks are on pace to record their biggest annual gain in 22 years, outperforming nearly all markets worldwide as economic conditions improve and traders bet on more interest-rate cuts, Bloomberg reported.
The South Asian nation’s benchmark KSE-100 Index has risen about 86% this year. That makes the index the second-best performer in local currency terms among the more than 90 tracked globally by Bloomberg.
Country watchers expect the boom to continue next year, bolstered by likely more cuts in borrowing costs and easing inflation, while a loan program from the International Monetary Fund helps to stabilize the economy.
Pakistan’s economy expanded more slowly than expected last quarter but has broadly recovered from 2023 when it narrowly escaped a default.
“This year was all about the return of domestic mutual funds to the market following a much steeper cut in rates than expected,” said Bilal Khan, head of international equity sales at Arif Habib Ltd. “Next year, we will see notable inflows from foreigners as investors will not be able to ignore allocating to Pakistan given the performance.”
According to a report by Topline Securities, the market capitalization of the companies listed on the KSE-100 surged by 61% in 2024, reaching Rs14.6 trillion. Pharmaceuticals, Jute, and Transport sectors emerged as the top performers, with their market caps increasing by 198%, 182%, and 130% respectively.
Sazgar Engineering Works led the KSE-100 with a 552% rise in share price, driven by a 220% YoY increase in 4-wheeler sales and a 96% YoY increase in 3-wheeler sales during the first 11 months of 2024.
Ali Asghar Textile Mills recorded an astonishing 2774% increase, transitioning from textiles to logistics and warehousing. Khalid Siraj Textile Mills gained 1156%, benefiting from its focus on yarn production.
