Moaaz Manzoor

The Pakistan Stock Exchange (PSX) surged by 3,908 points (3.51%) to close at 115,259 levels on Monday, reflecting the market’s vibrant momentum as the year 2024 drew to a close, reports WealthPK.

The PSX’s robust performance was driven by investor confidence, tax reforms, and expectations of single-digit interest rates in 2025. Speaking with WealthPK, Ali Najib, Head of Equity Sales at Insight Securities, described the rally as "a bullish spectacle fueled by unwavering investor confidence and wide-ranging buying across multiple sectors." He noted that sectors like banks, fertilizer, E&P, technology, and power were the primary beneficiaries, with major players such as HBL, DAWH, MCB, ENGRO, MARI, MEBL, BAHL, and SYS collectively contributing 1,856 points to the index's rise.

Najeeb attributed this momentum to factors such as the resolution of the ADR tax issue, which helped cool inflationary pressures, with December’s CPI expected to range between 4.5% and 4.9%. Additionally, he pointed to a continued shift from fixed income to equity funds as a significant driver of the PSX rally. Najeeb remarked that the market's rally was a testament to the investors' collective enthusiasm. He said, “The investors showed no hesitation in breaking through the critical levels, maintaining a bullish momentum throughout the session.”

Syed Zafar Abbas, General Manager at Zahid Latif Khan Securities, offered a forward-looking perspective, predicting sustained strong returns for the PSX in 2025. Abbas pointed to the anticipated declines in interest rates, which are expected to fall to single digit, as a key catalyst. He explained, “A strong external account is paving the way for lower rates, making equities the preferred asset class over alternative investments.” He further emphasized structural reforms and tight fiscal and monetary policies under the International Monetary Fund (IMF) program as ways to bolster investor confidence.

“These measures are likely to improve the investment climate and further support the market’s rally,” he added. The trading day underscored the PSX’s potential as a leading investment avenue, boosted by policy-driven optimism and shifting economic dynamics. The PSX's correction after a strong rally reflects a robust investor sentiment and expectations of a more favorable economic environment in 2025. With anticipated interest rate cuts and ongoing structural reforms, experts suggest the market is poised for sustained growth, presenting significant investment opportunities.

Credit: INP-WealthPk