PSX Becomes One of World’s Best Performing Markets in July

In July 2023, the Pakistan Stock Exchange (PSX) demonstrated exceptional performance, making it one of the best-performing stock markets in the world.

According to Arif Habib Limited (AHL), the growth was characterized by various positive developments that pushed PSX up by over 16 percent.

Another exciting day for #PSX today. #Pakistan is one of the best performing markets in the world in July. https://t.co/0f0QWMvWeG pic.twitter.com/N9YXO4hq5Y

— Shahid Ali Habib (@ShahidAliHabib1) July 31, 2023

At the onset of the month, the government secured a significant Stand-by Arrangement (SBA) facility of $3 billion from the International Monetary Fund (IMF), of which $1.2 billion was promptly disbursed. This pivotal IMF deal led to an upgrade in Pakistan’s sovereign rating by Fitch from CCC- to CCC.

Following IMF support, the State Bank of Pakistan received significant inflows/rollovers from allied nations, boosting the country’s forex reserves level to $8.2 billion by month-end. In addition, Pakistan attained a fourth consecutive monthly Current Account Surplus of $334 million in June 2023.

A notable MoU was signed between five Pakistani state-owned enterprises and Saudi Arabia, paving the way for a substantial $10 billion refinery project to be executed within Pakistan.

As a result of these positive developments and the optimistic expectation of resolving circular debt, market sentiment soared, leading the local bourse to surge past 48,000 points – a level not witnessed since 23rd August 2021. The benchmark KSE-100 index displayed remarkable growth, closing at 48,035 points, representing a substantial increase of 6,582 points or 15.9 percent on a MoM basis (the highest monthly return since April 20).

Average daily volumes during July 2023 settled at 384 million shares (+127 percent MoM) while the average daily traded value also increased by 149 percent to $41 million. Foreign investors bought shares worth $14.9 million predominantly in Banks ($8.6 million), Technology & Communications ($2.9 million), and Cements ($2.4 million), while net selling of $2.8 million and $0.9 million was witnessed in Other sectors and Power.