Karachi: With macroeconomic indicators improving under the IMF loan program, Pakistan’s research houses have predicted that the Pakistan Stock Exchange (PSX) will offer returns in the range of 27 to 37 percent on investments in its stocks. This will push the benchmark “KSE 100” to new highs of 120,000 to 127,000 by December 2025.
Arif Habib Limited, in its comprehensive report “Pakistan Strategy 2025: Conquering New Heights”, said that a possible market re-rating phase is underway with falling interest rates, a stable Pakistani rupee, and improving macroeconomic indicators.
Pakistan is attracting foreign direct investment, especially in the debt and equity markets. The pace of acquisitions and mergers of companies along with foreign direct investment (FDI) is also boosting investor sentiment.
The report titled “Pakistan Strategy – Pakistan Outlook 2025” said Topline Research that the successful completion of the IMF review in 2025, approval of the budget for fiscal year 2026 as per its guidelines and improvement in Pakistan’s credit rating will open the doors for issuance of Eurobonds and Sukuk.
Pakistan’s new relations with the US, joint imports under the Reko Diq agreement and successful privatization of entities like PIA and power distribution companies will improve the situation.
It should be noted that the stock market index “KSE 100” has been in the headlines for more than a year due to its excellent performance. The IMF team’s visit to Pakistan this week ended on a successful note.
The loan programs helped the country control the current account deficit and improve the balance of payments. It has helped restore the primary surplus after two decades.
Inflation, which peaked at 38 percent in May 2023, is now in single digits. Interest rates have come down to 15 percent from a peak of 22 percent.
The rupee has been stable against the dollar for a year now, trading between Rs 277 and Rs 279. The KSE 100 index has given a return of about 52 percent on investment in the recent calendar year.
