KARACHI: On the first trading day of the week at the Karachi Stock Exchange (PSX), the 100-Index surged by 200 points, reaching a benchmark of 66,335 points.
In the past 10 weeks, the KSE-100 index has witnessed a remarkable upswing, gaining around 18,000 points or a 37 percent increase. Back in 2017, the KSE-100 index benchmark stood at 52,000 points.
The stock market’s lackluster performance can be attributed to a blend of factors: policy uncertainty, political instability, an ongoing circular debt crisis, and an economic model heavily dependent on borrowing to fuel consumption.
The preceding government’s focus on bolstering real estate initiatives diverted liquidity toward real estate as a preferred asset class. Macroeconomic instability significantly influenced the market’s relatively stagnant performance.
Over the past five years, the rupee-dollar exchange rate displayed heightened volatility compared to the preceding two decades, resulting in a substantial rupee depreciation.
The absence of a coherent policy outlining the trajectory of the rupee-dollar exchange rate, or at least ensuring stability, further eroded the confidence of foreign portfolio investors in Pakistan.
