Moaaz Manzoor

The Pakistan Stock Exchange continues its record-breaking rally amid investor optimism fuelled by IMF-backed stability, but experts cautioned that sustainable economic growth depends on structural reforms, reports WealthPK.

The PSX sustained its record-breaking rally as investors continued to factor in the impact of IMF clarity and anticipated economic improvements. The KSE-100 Index closed at 118,770 points in the latest session, gaining 796 points (0.67%), as bullish sentiment remained intact. Market participants are showing long-term optimism despite prevailing volatility.

Speaking to WealthPK, Ali Najib, Head of Sales at Insight Securities, highlighted that the bulls have maintained control, keeping the index above the 118,000 mark. “The sustained rally underscores investors’ faith in the economic outlook, particularly as Pakistan is on track to secure a Rs1.25 trillion financing deal to tackle circular debt,” he noted.

He emphasised that the IMF-backed stability, combined with sectoral demand recovery, continues to drive investor optimism. Trading activity remained strong with 666.7 million shares changing hands at a total market value of Rs38.5 billion. CNERGY led the trading volumes, recording over 163.9 million shares exchanged. Key contributors to the index surge included MARI, SYS, FFC, PPL, and HUBC, collectively adding 849 points.

Ahmad Mobeen, Senior Economist at S&P Global Market Intelligence, said the stock exchange performance signalled positive investor sentiments fuelled by the smooth sailing of the long-term IMF programme.

“However, there is no clear and direct association between stock market performance and macroeconomic growth prospects, and sustainable growth in Pakistan will require addressing structural challenges such as high consumption share in the GDP, low investment to GDP ratio, elevated energy costs, undertaxed agriculture and retail sectors, as well as a very high share of the informal economy.”

While the stock market reflects investor confidence in the IMF-backed stability, experts stressed that long-term economic growth will require structural reforms beyond financial market performance.

Credit: INP-WealthPk