The Pakistan Stock Exchange (PSX) has become one of the top three best-performing stock markets in the world for the fiscal year 2025. According to Arif Habib Limited (AHL), the KSE-100 Index rose by 58.6% in local currency and 55.5% in US dollars.
This strong performance was driven by several key factors, including lower interest rates, better liquidity, and rising investor confidence across major sectors. PSX outperformed major markets such as Nasdaq, FTSE, and Sensex, coming behind only Ghana and Slovenia.
Local banks and development finance institutions (DFIs) played a major role in the rally, with net purchases totaling $391.9 million. On the other hand, mutual funds sold shares worth $236.4 million, marking the largest local outflow.
Sector-wise, the banking, fertilizer, and exploration & production (E&P) sectors attracted heavy investments. In contrast, the technology and cement sectors saw money flowing out.
Despite this strong growth, foreign investors pulled out around $300 million from the PSX. This reflects a broader global trend where international investors are moving funds to developed markets due to ongoing geopolitical tensions, rising interest rates, and a stronger US dollar.
While foreign investment declined, the overall performance of the PSX highlights renewed confidence in Pakistan’s economy and market fundamentals. The gains reflect investor optimism and strong support from local institutions, showing that PSX remains a key player in emerging market growth.
