Pakistan's KSE-100 Achieves Historic Heights, Sustaining a Bull Run: How Long Will It Last?
Pakistan's stock market, represented by the benchmark KSE-100 index, has experienced an unprecedented surge, reaching new heights after a six-year span. Breaking records since November 3, 2023, when it closed above 53,000, the KSE-100 has continued to rise, adding nearly 11% in less than three weeks. Despite this impressive bull run, market participants are left wondering about the sustainability of this upward trend.
Business Recorder 
Major Drivers Behind the Bull Run
The KSE-100 began the year around the 40,000 level and remained stagnant for the first six months. The turning point occurred with the International Monetary Fund's (IMF) approval for a $3-billion Stand-By Arrangement in June. This approval, viewed as an upgrade by many, injected optimism into the market. Subsequent rupee depreciation in August momentarily dampened spirits, but a significant government crackdown led to a record appreciation of the rupee, aligning with the KSE-100's upward trajectory.
Furthermore, the Election Commission of Pakistan's announcement of general elections in January 2024, coupled with the State Bank of Pakistan maintaining its monetary policy in October, provided additional momentum. Stakeholders remain bullish, emphasizing the low price-to-earnings ratio and enhanced profitability of PSX companies.
Experts' Insights and Projections
Despite the market trading at an all-time high, experts project continued positive momentum. Tahir Abbas, Head of Research at Arif Habib Limited (AHL), highlighted the attractive valuations, with the KSE-100's price-to-earnings ratio at 4.3x compared to the last 5-year average of 6x. Abbas confidently predicted the benchmark index reaching 60,000 by December 2023 and projecting a further surge to 80,000 by December 2024.
Murtaza Jafer, Head of Sales at Optimus Capital, expects the index to reach 61,000-62,000 by the end of December, contingent on the central bank's Monetary Policy Committee meeting. Jafer believes that an interest rate cut could comfortably propel the index to the projected levels.
Amreen Soorani, Head of Research at JS Global, attributed the buying spree to government actions against illicit trade and illegal currency operations. Soorani acknowledged strong corporate profitability and consistent dividend announcements but cautioned that the sustainability of the trend depends on the gradual depreciation of the rupee and the outcome of the next IMF review, as well as the timely conduct of general elections.
