Pakistan Stock Exchange’s KSE-100 index has emerged as Asia’s best performing market this year, with a remarkable 27% surge in dollar terms. According to a report by Bloomberg, the prospects for further growth are strong due to cheap valuations and the government’s efforts to secure a new loan from the IMF.
Despite trading at a record high, the index boasts a one-year forward earnings-based valuation of 3.8x – a 50% discount to its average, indicating lucrative investment opportunities. However, political instability remains a concern, as the government’s weak mandate and austerity measures could lead to potential challenges.
With a focus on meeting debt payments and aligning with IMF conditions, the country has raised taxes on key industries. The benchmark index’s performance has led to overbought levels, signaling a possible correction in the near future.
Overall, Pakistan’s stock market continues to show promise amidst economic challenges, making it a market to watch for potential investors.
