Global Stock Index KSE-100 Surpasses Markets in U.S., India, and Germany, Securing a Spot Among Top World Performers in FY25
Pakistan's Stock Exchange Stuns Globe in FY25, Outperforming Major Markets
In an unexpected turn of events, the Pakistan Stock Exchange (PSX) claimed the crown as one of the world's top-performing stock markets during FY25. The benchmark KSE-100 Index astonished with a jaw-dropping 55.5% return in USD terms, securing the third spot globally. Only Ghana's GGSECI Index, offering a 140.7% return and Slovenia's SBITOP Index (56.7%) outperformed KSE-100 during the outgoing fiscal year.
A report by Arif Habib Limited (AHL) revealed this impressive feat. In comparison to other global markets, Pakistan impressed major developed and emerging economies. The US Nasdaq Index returned 14%, Germany's DAX 46.9%, India's Sensex 3.2%, and Japan's Nikkei 12.8%. Most regional markets trailed far behind, with countries like Turkey and Bangladesh posting negative returns of -28.1% and -13.6% respectively.
The KSE-100 Index performed remarkably well, surging by 58.6% in PKR terms and an impressive 55.5% in USD terms to close at 124,379, up from 78,445 at the end of FY24. AHL attributed this rally to aggressive monetary easing, improved market liquidity, and the unlocking of fundamental value across key sectors.
Regional Investment Trends
According to AHL's report, widespread net selling by foreigners was observed across listed regions in FY25. Taiwan recorded the highest outflow at $28,783 million, followed by South Korea at $23,577 million, and India at $11,263 million. Outflows were also seen in Malaysia at $3,546 million, Vietnam at $3,101 million, and Thailand at $3,207 million.
Relatively smaller net sells were recorded in Indonesia at $1,634 million, Philippines at $477 million. Meanwhile, Pakistan saw an outflow of $300 million. The report suggests that geopolitical tensions, reciprocal tariffs announced by the US, high global interest rates initially prompting capital withdrawal, strong US dollar pressure, and a shift toward developed markets likely drove this uniform net selling trend[3]. Additionally, in Pakistan, institutional investors engaged in profit-taking and squared their positions near the fiscal year-end, further contributing to selling pressure on the PSX[4].
In certain sectors like India, foreign portfolio investors sold off sectors such as fast-moving consumer goods (FMCG) and power stocks due to high valuations and preferences shifting towards rate-sensitive sectors[2]. Collectively, these factors resulted in significant foreign portfolio outflows from Pakistan and other emerging markets, reflecting a broader trend of risk aversion among global investors.
- Thebenchmark KSE-100 Index, having outperformed major markets during FY25, showcased a 55.5% return in USD terms, achieving the third-highest rank globally.
- Compared to other global markets, Pakistan's Stock Exchange (PSX) impressed major developed and emerging economies, with returns only surpassed by Ghana and Slovenia.
- Aggressive monetary easing, improved market liquidity, and the unlocking of fundamental value across key sectors significantly contributed to the KSE-100 Index's impressive rally in FY25.
- Foreign investment trends showed widespread net selling by foreigners in FY25, with Pakistan recording an outflow of $300 million, following regions like Taiwan, South Korea, India, and Malaysia.
- In certain sectors like India, foreign portfolio investors sold off sectors with high valuations, such as fast-moving consumer goods (FMCG) and power stocks, contributing to significant foreign portfolio outflows from Pakistan and other emerging markets.
- Institutional investors in Pakistan engaged in profit-taking and squared their positions near the fiscal year-end, further contribuiting to selling pressure on the PSX.
