KSE-100 Index Crosses 114,000 Points for the First Time in History
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index soared past the 114,000-point milestone on Thursday, setting a historic record driven by robust macroeconomic indicators, rising investor confidence, and expectations of monetary easing.
The index surged by 3,370.29 points, or 3.04%, to close at 114,180.5, with an intraday peak of 114,408.62. This rally underscores a significant upswing in market momentum, supported by economic recovery and policy reforms.
Key Drivers Behind the Rally
- Improved Macroeconomic Indicators
- Pakistan’s Current Account Deficit (CAD) narrowed by 79% year-on-year to $217 million during the first two months of FY2025.
- August 2024 marked a surplus of $29 million, supported by strong remittance inflows and steady export earnings.
- Investor Confidence in Economic Policies
- Successive interest rate cuts have redirected investments from bonds to equities.
- The International Monetary Fund (IMF) program and government measures have bolstered key metrics, including inflation control and foreign exchange reserves.
- Export and Remittance Growth Projections
- Exports are forecasted to reach $33 billion in FY2025, aided by domestic production enhancements, exchange rate stability, and growth in partner economies.
- IT service exports are expected to rise from $3.2 billion in FY2024 to $4.2 billion in FY2025.
- Remittances are projected to grow to $33.5 billion in FY2025, bolstered by government initiatives encouraging legal banking channels and reduced global inflation.
Market Commentary
Sana Tawfik, Head of Research at Arif Habib Limited, highlighted liquidity as a crucial driver for the stock market’s performance. “The shift from bonds to equities, combined with economic stability under the IMF program, has propelled the market to new heights,” she said.
The government’s allocation of Rs80 billion for transaction rebates and incentives to promote formal remittance flows is another factor contributing to economic stability and market optimism.
Looking Ahead
The record-breaking rally reflects growing confidence in Pakistan’s economic recovery. With macroeconomic indicators showing sustained improvement, the KSE-100 Index is positioned for continued growth, reinforcing investor optimism in the stock market as a viable investment avenue.
