The Pakistan Stock Exchange (PSX) achieved a significant milestone by surpassing the psychological barrier of 53,000 points, reaching a new all-time high. This remarkable feat was driven by several key factors and had not been witnessed for a period of six and a half years.
The primary catalyst behind this surge was the exceptional corporate profits reported by companies listed on the PSX. These companies, representing a diverse array of sectors, reported record-high profits for the quarter ending in September 2023. The remarkable aspect of this performance is that it occurred despite the prevailing economic slowdown. Key sectors contributing to this success included commercial banks and oil and gas exploration firms.
Investors and market participants were encouraged by the positive developments in the economic landscape of Pakistan. The initiation of the first International Monetary Fund (IMF) review of the country’s economy within the framework of a $3 billion loan program provided a strong vote of confidence. This review, which commenced on a Thursday, indicated that Pakistan was on track with its financial commitments and obligations, boosting overall market sentiments.
Another crucial factor that added to the optimism in the market was the announcement of the election date by the Election Commission of Pakistan (ECP), following consultations with President Arif Alvi. This development helped instill confidence among investors, who saw it as a positive sign for the stability and continuity of the country’s political landscape.
Muhammad Sohail, the CEO of Topline Securities, highlighted that this historic achievement was a result of concerted efforts and conducive conditions in the market. He emphasized that this milestone was accomplished after a prolonged period of six and a half years, signifying the resilience and potential of the Pakistan benchmark stock index. Importantly, Sohail pointed out that despite the record-breaking performance, the valuation of the market remains relatively low, with a price-to-earnings (PE) ratio of 4, in stark contrast to the PE ratio of 12 recorded back in 2017. This provides ample room for potential growth and expansion in the market.
In conclusion, the PSX’s record-breaking performance reflects the robustness of Pakistan’s financial markets, underscored by exceptional corporate profits, positive economic reviews, and political stability. The combination of these factors has opened up new horizons for financial excellence and potential growth in the market, offering investors and stakeholder’s opportunities for further expansion and prosperity.