Retail investors are helping extend the surge at the Pakistan Stock Exchange (PSX), as the benchmark KSE-100 Index has gained roughly 40% in 2025, reflecting renewed confidence in local equities, according to Bloomberg on Wednesday.
As per the report, individual traders are turning to equities amid a stagnant real estate sector and a decline in deposit rates.
“We’re now seeing a liquidity-led rally,” said Mohammed Sohail, chief executive officer at Topline Securities Ltd. “Unless that liquidity finds a new avenue, the markets will likely stay strong,” he told Bloomberg.
The report was of the view that small traders are eyeing domestic stocks “as Pakistan’s economy regains ground after it came close to defaulting on its debt in 2023”, citing improvement in sovereign credit rating by S&P Global Ratings and Fitch Ratings.
KSE-100 could hit 203,000 by 2026 as reforms boost sentiment, says Topline
“In addition, efforts by Field Marshal Asim Munir to improve US ties have supported equities,” it added.
As per Bloomberg data, trading activity at the bourse has also increased, with daily turnover topping $200 million in October, the highest since 2017.
Meanwhile, flows into local equity mutual funds have also picked up, with nearly 16% of total assets managed by asset management companies now invested in stocks at the end of September, read the report, citing data from the Mutual Funds Association of Pakistan.
“After years of constant shifts in political leadership, the nation is experiencing a period of steadiness that’s likely to continue for some time,” Mattias Martinsson, chief investment officer of Stockholm-based fund Tundra Fonder AB, told the international media outlet.
However, rising inflation could spoil the party, said Bloomberg, which expects a further pickup in prices after they accelerated more than expected in October.
Moreover, a rise in tensions with neighbouring India and Afghanistan could also weigh on sentiment.
To be optimistic from here on, “you need to expect that the next 10 years for Pakistan will be better than the last ten,” said Martinsson. “We could see even more gains in Pakistan, but they could be slower and steadier than what we saw in the last few years.”
