The KSE-100 Index outperformed all major asset classes in Pakistan during FY25, delivering a powerful 55.6% return. This surge came on the back of aggressive monetary easing, increased liquidity, and renewed investor confidence across key sectors, according to Arif Habib Limited (AHL).
Equities Outshine Gold, Bonds
AHL’s report highlighted that the KSE-100 outpaced traditional investment vehicles. Gold trailed behind with a return of 47.56%, while T-Bills, Defence Saving Certificates, and bank deposits hovered near 12.6%. Pakistan Investment Bonds (PIBs) followed with 11.97%, and the Pakistani rupee depreciated slightly by 1.91% against the US dollar.
Long-Term Growth Leader
The KSE-100 also posted a higher Compound Annual Growth Rate (CAGR) over long-term periods—5, 10, and 20 years—outperforming gold, bonds, and forex. AHL noted that this cements equities as the most rewarding asset class for investors with a long-term horizon.
Read: Gold Price Sees Steady Trend in Pakistan on June 27 Amid Global Markets
Stellar FY25 Rally
The benchmark index closed FY25 at 124,379 points, a leap from 78,445 at the end of FY24. That marks a 58.6% gain in PKR terms and 55.5% in USD terms. The market rally was driven by multiple factors:
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The State Bank of Pakistan cut its policy rate from 21.5% to 11% in one of the most aggressive easing cycles ever.
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Market liquidity improved significantly.
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Fundamental value was unlocked in banking, energy, and construction sectors.
Record Market Activity
FY25 also witnessed record trading activity. Volumes reached historic highs, and trading value hit its highest level since FY21.
Fitch Ratings played a role in boosting sentiment by upgrading Pakistan’s credit rating from CCC+ to B- following the IMF’s approval of a $7 billion Extended Fund Facility and $1.3 billion under the Resilience and Sustainability Facility.
Volatility Amid Tensions
Despite overall gains, geopolitical tensions rocked the market in May and June due to escalations between Pakistan and India, and Iran and Israel. However, ceasefire announcements led to some of the strongest rebound rallies in recent memory, reinforcing investor optimism.
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