PSX kicks off 2025 strong as fresh allocations drive optimism

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The stock market opened the first trading day of the year on a strong note, fueled by fresh allocations and optimism around the federal government’s recently announced economic transformation plan, “Oran Pakistan”.

The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed up 1,881.18 points or 1.63 percent at 117,008.08, marking a strong start to the year. The index hit an intraday high of 117,341.03 and a low of 114,719.89, signaling sustained investor interest and confidence.

Investors were further encouraged by signs of improving fiscal health, as the better-than-expected tax collection numbers signaled that additional tax measures may not be needed.

“As the new year begins, new allocations are driving the markets. Ismail Iqbal Securities Chief Executive Officer Ahfaz Mustafa said the better-than-expected tax collection number is also indicating that the mini-budget or more taxes No need to apply.

Prime Minister Shahbaz Sharif’s launch of “Iran Pakistan”, a five-year national economic transformation plan, has been a key driver of market optimism. The plan aims to attract foreign investment of $10 billion annually and encourage local investment through sustainable export development. The “5Es”—focusing on exports, e-Pakistan, environment, energy, equity, and empowerment—are expected to achieve GDP growth of six percent by 2028, creation of one million jobs annually, and private sector investment. Aims for significant contribution.

The Prime Minister emphasized the need for national unity and political coordination to ensure the success of the project, stressing that improved performance Privatization and outsourcing will be necessary to create and reduce wastage of resources. He reiterated his call for a “Charter of Economy”, urging all political parties to come up with policies for long-term economic stability. Synchronize the

The Federal Board of Revenue (FBR) announced a tax shortfall of Rs 386 billion for the first half of the current financial year (July-December), with a total revenue collection of Rs 5,623 billion. This fell short of the IMF target of Rs 6,009 billion. Despite the shortfall, the FBR managed to raise Rs 72 billion through a new tax on the banking sector, raising the tax rate from 39 percent to 44 percent.

Finance Minister Muhammad Aurangzeb had predicted on Sunday that inflation in December could be between 4-5 percent. He also hinted that single-digit interest rates are within reach, with the current policy rate already down to 13%.

The PSX has seen strong performance throughout the year, with the KSE-100 index returning 84% in 2024, the highest since 2002. The market recorded its third biggest one-day rally on Monday, rising 3,907.82 points to close at 115,258.99. . Despite volatility earlier in the month, the equity market has shown resilience, supported by strong economic indicators, including a more than decade-long current account surplus of $729 million in November.

Foreign direct investment (FDI) increased by 31 percent year-on-year during the first five months of fiscal year 2024-25, reflecting international confidence in Pakistan’s economic recovery. During the same period, exports increased by 12.57 percent to $13.69 billion, while imports decreased by 16.91 percent, improving the trade balance.

Despite external debt repayments that reduced State Bank of Pakistan (SBP) reserves by $228 million to $11.9 billion, analysts remain optimistic about Pakistan’s economic momentum. The PSX, the second best performing stock market globally in 2024, is positioned for sustained growth through 2025, driven by macroeconomic reforms, political stability, and accommodative fiscal policies.

In the last trading session of 2024, the stock stumbled a bit and closed marginally lower by 132 points amid year-end institutional profit-taking. The KSE-100 index fell 0.11 percent to 115,126.9 points from 115,259 points recorded in the previous session.