Karachi: Shares at the Pakistan Stock Exchange (PSX) surged over 900 points on Thursday, pushing the KSE-100 Index past the 100,000-point milestone for the first time in history.
The index jumped by 947.32 points, or 0.95%, to reach 100,216.57 points at 9:35 AM, up from the previous close of 99,269.25 points.
Unprecedented Growth Amid Recovery
The record comes just two days after political tensions caused brief uncertainty in the market. The PSX rebounded with an extraordinary single-day gain on Wednesday, setting the stage for Thursday’s historic surge.
Mohammed Sohail, CEO of Topline Securities, highlighted the rapid growth, saying, “A remarkable 150% return from 40k to 100k in just 17 months!”
He credited the new IMF loan, improved fiscal and monetary discipline, falling inflation, and declining interest rates for boosting investor confidence and injecting liquidity into the stock market.
Historical Perspective on PSX Growth
Sohail pointed out the long-term growth of the market, noting, “From less than 1,000 points in the late 1990s to 100,000 today, the market is up 100 times.” He emphasized that this growth came despite economic challenges over 25 years, yielding annual returns of 20% in rupees and 13% in dollars.
Yousuf M. Farooq, Director Research at Chase Securities, referred to the 100,000-point mark as a “psychological barrier.” He advised investors to focus on long-term compounding rather than short-term fluctuations.
He projected that, at a 17% annual compounded return, the PSX could potentially reach 480,000 points by 2034 and over 2,300,000 points by 2044.
Bull Run Driven by Stability
Awais Ashraf, Director Research at AKD Securities, credited political and macroeconomic stability for driving the bull run. He noted that the IMF bailout played a crucial role in easing inflation and stabilizing the economy.
Ashraf explained that inflation dropped from 38% to 7.2%, allowing the State Bank of Pakistan to lower the policy rate by 700 basis points this year. This also helped boost foreign exchange reserves.
Market Attractiveness and Investment Opportunities
Despite the surge, experts believe the market remains undervalued. Ashraf highlighted that the current price-to-earnings ratio of 4.7x is significantly lower than historical averages and regional benchmarks.
He added that declining fixed-income yields and ongoing macroeconomic stability make equity investments an attractive option.
Advice for Retail Investors
Experts urged retail investors to adopt a long-term perspective. Farooq recommended investing small amounts monthly in a diversified portfolio. He emphasized consulting financial advisors to align investments with individual risk appetites.
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