Pakistan Budget Boosts Investor Confidence in Stock Market
The PSX's growth is a testament to the country's economic resilience, with the stock market becoming a symbol of economic stabilisation. The budget presentation is expected to provide further impetus to the market, with the government's policies and allocations likely to have a significant impact on the economy and the stock market.
The Pakistan Stock Exchange (PSX) has reached an all-time high, with the KSE-100 index growing 50.2% from 78,445 to 117,807 points, driven by a stable macroeconomic environment and robust corporate earnings, as the federal government prepares to present its budget for 2025-26, estimated to be Rs17.6 trillion.
The market capitalization of the PSX increased by 38.5% to Rs 14,374 billion, with the number of listed companies rising to 527. The Pakistan Mercantile Exchange (PMEX) traded 5.88 million commodity futures contracts, valued at Rs 6.54 trillion, marking a 60% increase in value compared to the previous year. The benchmark KSE-100 Index gained nearly 400 points, settling at 122,024.44, an increase of 383.44 points or 0.32%.
The exceptional performance of the PSX is attributed to robust corporate earnings, declining interest rates, and a successful IMF Extended Fund Facility programme review. The PSX is now ranked among the top-performing equity markets globally, with a 30% growth in foreign investment, the highest over a decade. Despite the record-high performance, the PSX remains undervalued, trading at a significant discount relative to regional peers, with a one-year forward P/E ratio of around 6.0x.
The presentation of the Pakistan budget for 2025-26 is expected to further boost investor confidence, with the IMF agreement optimism and Eid holidays contributing to the positive market sentiment. As the PSX continues to grow, it is likely to attract more investors, both local and foreign, and play a key role in the country's economic stabilisation.