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PSX Takes the Crown as the Best-Performing Market of 2023!

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The Pakistan Stock Trade’s (PSX) benchmark KSE-100 List gave an addition of 55% in 2023, as per a report by Topline Protections.

This benefit consists of profits received during the period. This increase of 55% was seen after 13 years after the 60% increase in the index in 2009. In 2023, growth in US dollar terms stood at 24 percent.

The report highlighted that the KSE-100 index is a tale of two halves, with the index gaining 4 percent in 1H2023 and 51 percent in 2H2023.

In 2H2023, a better-than-expected IMF Standby Agreement (SBA), followed by the successful completion of the IMF’s first review, a stable currency, and the announcement of elections helped improve investor sentiment.

This sudden recovery in prices coincides with a marked improvement in trading activity on the PSX with daily volume (ready/cash) up 41% in 2023 to 323 million shares/day, the highest since 2021.

Similarly, the average value of daily trade increased by 45% to Rs. 10 billion shares a day in the cash market, the highest since 2021. Total trading volume and daily value in the futures market also increased by 17 percent and 24 percent to 110 million shares per day and Rs 4.5 billion per day, respectively.

PSX’s Incredible 2H2023 Performance

According to Bloomberg data, Pakistan’s KSE-100 index was among the three best-performing markets in domestic returns in 2023. However, in terms of US dollars, it was not in the top 10. In 2H2023, PSX was the best-performing market. According to Bloomberg, the PKR gained 51 percent and the US dollar gained 54 percent.

Top 10 Best Performing Markets in 2023Top 10 Best Performing Markets in 2H2023
CountryU$$ ReturnCountryU$$ Return
Romania62%Pakistan54%
Cyprus60%Romania45%
Poland52%Egypt42%
Hungary49%Poland23%
Srilanka49%Colombia23%
Greece48%Cyprus18%
Mexico41%Hungary18%
Egypt40%Bulgaria17%
Italy39%Denmark17%
Lebanon41%Kazakhstan16%
Source: BloombergSource: Bloomberg

The KSE index also outperformed other asset classes in 2023 including 1-year US$ New Pakistan Certificate (+33 percent), US Dollar (+24 percent), T-Bills (+23 percent), and Gold (+ 21 percent) included. The property index posted returns in the range of 6-29 percent in 2023.

Pakistan Market (PSX) saw only one IPO in 2023, with a measly Rs. 435 million funds raised. This is the lowest amount collected in a single year in the last decade and the previous record low by half a rupee. 800 million views in 2013. Economic instability, rising risk of default, cheap prices and political uncertainty have discouraged equity investment in 2023, the report said.

Foreign corporates became the net buyers in 2023 with net purchases of $73 million after 3 years and the 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, with companies buying $128 million worth of shares while individuals bought $27 million worth of shares.

However, domestic mutual funds and banks reduced their positions in 2023 with net sales of $132 million and $61 million, respectively.

Disclaimer: We may be compensated by some of the companies whose products we talk about, but our articles and reviews are always our honest opinions. For more details, you can check out our editorial guidelines https://propakistan.pk/

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