Pakistan Stock Exchange (PSX) has achieved its highest daily traded value in almost two decades, with the ready-market turnover reaching approximately Rs85 billion. This surge highlights growing investor confidence and increased market activity.
Equity returns have been strong since the start of 2026, with a gain of 6.3% in the first four trading sessions, reinforcing the momentum of the ongoing rally. In contrast, returns from fixed-income investments have significantly dropped over the past 18 months. Yields, which stood above 24% in mid-2024, have fallen to nearly 9-10% currently, pushing investors towards the stock market in search of better returns.
Market participants attribute the sharp rise in turnover to aggressive buying by local mutual funds, driven by a sustained shift of investments from fixed-income products into equities. This shift is largely due to declining yields on fixed-income instruments, making them less attractive compared to equities.
Analysts believe that falling interest rates, ample liquidity, and improved risk appetite have made equities the preferred investment choice. This has been further supported by institutional participation and rising market valuations.
Despite the strong performance in 2025, Pakistan’s equity market faced challenges in attracting sustained foreign investment. According to data from the State Bank of Pakistan, foreign investors withdrew $393 million from the equity market in the first half of FY26, compared to $142 million in inflows, resulting in net outflows of $251 million.
Looking ahead, AKD Research projects continued positive momentum for the KSE-100 Index throughout 2026, with a forecasted return of 53% for the year. The brokerage firm expects the index to reach 263,800 points by December 2026, with a historic market capitalisation of $100 billion.
