In a significant milestone, the Pakistan Stock Exchange (PSX) surpassed the 57,000 mark during early intraday trading on Thursday, buoyed by the positive impact of the staff-level agreement with the International Monetary Fund (IMF) regarding the first review of the $3 billion stand-by arrangement. The surge in the benchmark KSE-100 Index reflects growing investor confidence.
As of 11:24 am, the KSE-100 Index touched 57,110.62 and was at 57,059.19, indicating a 0.67% net gain for the current session. This bullish trend positions the Pakistan Stock Exchange as an increasingly attractive option for investors, particularly when compared to a somewhat stagnant or declining real estate sector.
The optimism in the stock market is attributed to factors such as the IMF agreement, diverting attention from over-investment in real estate, traditionally considered a safe haven. This shift may discourage investment in safe haven currencies like the dollar and assets like gold.
Pakistan’s historically low ratio of stock market investors, compared to global standards, has often been influenced by the perceived safety and profitability of real estate, gold, and the US dollar. The focus on these traditional investment avenues has, to some extent, hindered investment in manufacturing, research, and innovation, crucial for developing a sustainable economy at both individual and institutional levels.
The surge in the stock market is not only a positive economic indicator but also holds the potential to drive listed companies to expand their operations, creating new job opportunities amid the backdrop of a rising unemployment rate. This development comes at a crucial time for Pakistan’s economy, which has grappled with record-high inflation and interest rates, leading to limited economic activity and an urgent need for job creation.
