Amongst major asset classes widely followed by local investors and savers, gold, 1-year US$ Naya Pakistan Certificates, and US Dollar remained the best-performing assets in Pakistan in 2022.
According to Topline Securities, these asset classes provided better returns compared to the estimated average CPI inflation of around 20 percent in the outgoing calendar year 2022.
Gold posted a gain of 41 percent in 2022 rising from Rs. 108,200/10 gram to Rs. 152,700 after gaining 11 percent in 2021. In the local Sarafa/Bullion market, gold rallied in line with the increase in the USD rate in the black market.
Currently, gold is valued at black market parity rather than the official rate which is 10 percent lower. Although in the international market gold remain more or less stable in 2022.
The holder of Naya Pakistan US$ Certificate under Roshan Digital Account (RDA) also made 36 percent in PKR terms due to falling PKR value. Similarly, holders of cash USD made a gain of 28 percent in 2022 as the official bank rate of USD rose from Rs. 177 at end of 2021 to Rs. 226 now.
It was observed that a lot of investors transferred their capital to fixed-income instruments in 2022 due to rising interest rates. The policy rate in Pakistan increased from 9.75 percent to 16 percent in 2022. Following this, the 3-month T-Bill average gain was 14 percent in 2022. Similarly, local money market funds also generated a 14 percent average return in 2022.
Similarly, the Return on Bank Deposits (excluding current accounts) and Special Saving Certificates issued by the Government of Pakistan was 11 percent on average in 2022.
The most famous and widely followed property sector was also affected in 2022 due to macroeconomic concerns. Indices tracking houses, plots, and residential property were up 12-14 percent in 2022, said the report.
In broader terms, Pakistan’s weak external account situation, rising interest rates, and political uncertainty led to lower interest in equities and bonds. Added to this, government bond prices fell due to rising policy rates. Benchmark 10-year PIB posted a negative return of 2 percent (inclusive of an 8 percent coupon) in 2022.
The stock market along with Equity Funds underperformed other major asset classes in 2022 with the benchmark KSE 100 Index falling 10 percent.
