Amid efforts by Prime Minister (PM) Imran Khan’s team to stabilise the country’s economy, Pakistan has outperformed some of the world’s leading stock markets, including those of Germany, Sweden, Russia and Ireland.
According to Bloomberg, Pakistan’s stock market surged by 30% (almost 10,000 points) during the past three months, outperforming the leading stock markets. Ireland’s stock market rose by 19%, followed by Russia’s RTS Index with a 16% increase, Sweden OMX Stockholm 30 with 14% and Germany’s DAX Index that increased by 13.9%, during the same period of time.
Pakistan’s KSE-100 Index has advanced to the highest level in seven months, after falling to the lowest in almost five years in August, amid attempts by the government to stabilise the economy with a $6 billion loan from the International Monetary Fund (IMF) after a deficit blowout.
At the same time, bond yields have begun to fall after peaking around 14% mid-year, making debt investments less attractive.
Even over a week after the report, the stock market remains positive and continues its upward trend. On Tuesday, it touched over 40,000 points in the beginning trade hours. This came a day after the stock exchange gave the highest monthly return in over 6.5 years as the benchmark index rallied past 40,120 points.
The upward trends in the market, coupled with Moody’s — financial services company — upgrading credit rating of Pakistan, have boosted the confidence of investors. The collective response and profits for traders and investors are making the local market lucrative for prospect interests within and without the country.
This has materialised also in figures of net-buyers. More people are currently buying shares compared to those selling them.
According to Samaa, Moody’s expects the current account deficit of Pakistan to continue narrowing in the current and next fiscal year, averaging around 2.2% of the GDP. It was more than 6% in the fiscal year 2018 and around 5% in the fiscal year 2019.
The stock market had investors pulling out their funds since it plummeted to below 29,000 points in August, owing to the political instability causing negative sentiment and pushing stocks to the verge of a crash. Contrary to the erstwhile beliefs and speculations, the market hit on Monday its highest benchmark index in over 6 months, while the ROI were recorded to be the most since May 2013.
