Monthly Review: PSX Up 16.59%, Earns $3.5M in Foreign Revenue in November

The Pakistan Stock Exchange (PSX) saw a phenomenal rise of nearly 17 percent in November 2023 and the highest foreign investment in six years at $3.5 million, indicating strong investor confidence in the country's economic recovery.

On a percentage basis, this was the highest monthly return in more than a decade, second only to the abnormal return of Covid in April 2020.

Pakistan's stock market rally was a key factor in the benchmark's 50 percent rise since late June, making it the world's second-best performer during the period, behind Argentina.

The month's gains were driven by investor confidence in the country's economic prospects after a $3 billion stand-by loan (SBA) with the International Monetary Fund (IMF) avoided sovereign debt default.
 
Expected inflows from the IMF and friendly countries such as China and Saudi Arabia with relatively stable currencies and a possible drop in interest rates also added to market sentiment.

Average daily volumes and values ​​also rose significantly, reflecting increased market activity. The KSE-100 index gained 6.02% in the fiscal year and 9.75% in the calendar year, making it one of the best performing markets in the world.

However, the market may slow down slightly in the coming months, as the completion of the ongoing IMF loan program is critical to cover the external financing gap of about $5.3 billion from the current fiscal year. The country will continue to need more loan programs in the future, as its external financing needs are projected to average $30 billion annually in fiscal years 2025-2028.

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