KARACHI: The stock market has shown remarkable performance in recent years, with the KSE-100 index rising from a minimum of 40,000 points to nearly 170,000 points, a gain of over 300 percent.
Business circles are praising the market, with analysts noting that “only Pakistan’s stock market is moving strongly.”
Experts attribute this rapid growth to deep liquidity, capital market reforms, strong corporate earnings, high dividends, and very low valuations, where major stocks have been trading at three times their price-to-earnings ratio.
However, a key concern remains. Despite strong performance, foreign investors have withdrawn approximately $3 billion over the past decade.
Analysts explain this trend as a consequence of political instability, IMF programs, circular debt, growing fiscal deficits, declining exports, and downgrades in credit ratings, which have undermined long-term confidence in Pakistan’s market.
Foreign fund managers now view Pakistan more for tactical trading than long-term investment. Repeated interest rate fluctuations, currency depreciation, low foreign exchange reserves, and reliance on external aid are seen as significant risks.
Looking ahead, experts believe Pakistan has exceptional opportunities over the next five years. Continued reforms could attract $40–50 million annually in foreign portfolio inflows.
Privatization of loss-making entities such as PIA and DISCOs, controlling circular debt, increasing tax-to-GDP ratio, and ensuring policy continuity in gas and LNG usage are critical.
Economic specialists emphasize that sustainable growth depends on achieving 4–5 percent annual GDP growth, driven by exports and foreign direct investment rather than debt.
Sectors such as IT, agricultural value chains, minerals, services, logistics, and green energy can serve as foundations for growth.
