Moaaz Manzoor

Growing investor optimism, political stability and policy rate cuts are continuously propelling the Pakistan Stock Exchange to new heights, reflecting a favourable economic outlook, reports WealthPK.

Speaking to WealthPK, Syed Kashan Kazmi, Managing Director of Integrated Equities Limited, highlighted the government’s commitment to the International Monetary Fund’s three-year programme as a key driver of short-to-medium-term economic stability. He emphasised that this commitment sends a strong signal to local and international investors about the government’s resolve to ensure economic discipline. Kazmi noted: “We are witnessing a sustainable bullish rally which will continue for the next two to three years if no political or economic upheaval occurs.”

He also highlighted the policy interest rate cut as a pivotal driver, redirecting funds from fixed-income assets into equities and sparking a rally in mutual funds. “This shift, coupled with the stability of the Pakistani rupee, has significantly boosted market sentiment. The stability of the currency, coupled with well-timed interest rate reductions by the SBP, has significantly bolstered investor sentiment and activity in the stock market,” he added. Similarly, Muhammad Hamza Anwaar, Public Relations Manager at Zahid Latif Khan Securities, emphasised the transformative impact of declining interest rates on investment behaviour.

He explained that rate cuts were prompting a shift from fixed-income instruments to the stock market, creating fresh opportunities for economic growth. “The economy is on a growth trajectory. With interest rates coming down, more people are moving away from fixed income to the stock exchange,” he noted. According to Anwaar, Pakistan’s stock market presents a compelling investment case due to low stock prices and the anticipated economic rebound, making it an attractive destination for domestic and foreign investors.

The PSX’s 100 index reflects robust market potential, with experts predicting further growth contingent on stable GDP, declining interest rates and controlled inflation. Anwaar pointed out that favourable economic indicators and policy reforms contributed to a more appealing equity market. “If these trends persist, Pakistan’s stock market could potentially reach new highs, attracting domestic and foreign investors seeking undervalued assets,” he said. The combination of stable political conditions and sound economic policies has created an environment conducive to sustained growth in Pakistan’s stock market.

The PSX’s recent performance underscores the critical role of investor confidence in driving economic progress. Experts project that the market will continue to rise, provided no significant disruptions occur. This optimism reflects a broader economic recovery and resilience trend, making the PSX a focal point of Pakistan’s growth trajectory.

Credit: INP-WealthPk