The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index provided a gain of 55 percent in 2023, according to a report by Topline Securities.
This gain is inclusive of dividends received during this period. This gain of 55 percent is seen after 13 years, following a 60 percent increase in the index in 2009. The increase in US Dollar terms stood at 24 percent in 2023.
The report highlighted that the KSE-100 Index is a tale of two halves, with the index up 4 percent in 1H2023 and 51 percent in 2H2023.
In 2H2023, better than expected IMF Stand-By Agreement (SBA), followed by the successful completion of the first IMF review, a stable currency, and the announcement of elections, helped improve investor sentiments.
This sudden recovery in prices has been accompanied by significant improvement in trading activity with volumes (ready/cash) per day at PSX up 41 percent to 323 million shares/day in 2023 which was the highest since 2021.
Similarly, the average traded value per day was up 45 percent to Rs. 10 billion per day in the cash market which was also the highest since 2021. In the futures market, total traded volume and value per day were also up by 17 percent and 24 percent to 110 million shares per day and Rs.4.5 billion per day, respectively.
PSX Best-Performing in 2H2023
As per Bloomberg data, Pakistan’s KSE-100 Index was amongst the three best-performing markets in local return in 2023. However, in US Dollar terms, it did not rank among the top 10. In 2H2023, PSX was the best-performing market, as per Bloomberg, gaining 51 percent in PKR and 54 percent in US Dollar.
KSE Index also outperformed other asset classes in 2023 including 1-year US$ Naya Pakistan Certificate (+33 percent), US Dollar (+24 percent), T-Bills (+23 percent), and Gold (+21 percent). Property indices posted returns in the range of 6-29 percent in 2023.
Pakistan market (PSX) saw just one IPO in 2023, with a meager Rs. 435 million of funds raised. This is the lowest amount raised in a year in the past decade and half of the previous record low of Rs. 800 million seen in 2013. Macroeconomic instability, coupled with the looming threat of default, cheap valuations, and political uncertainty discouraged equity investment in 2023, stated the report.
Foreign corporates turned net buyers in 2023 with net buying of $73 million after 3 years and highest inflows after 8 Years. To highlight, in the last 3 years (2020-2022), foreign corporations have sold shares worth $1.1 billion.
Companies and individuals were also net buyers in 2023 where companies bought shares worth $128 million while individuals bought worth $27 million.
However Local Mutual Funds and Banks trimmed their position in 2023 with net selling of $132 million and $61 million respectively.
