Why This Rally Runs Deeper Than Headlines
Surface-level explanations — IMF talks, a stable rupee, attractive valuations — are valid, but incomplete.
- Macro stabilisation bearing fruit: The FY24 budget was explicitly designed to secure IMF support. Combined with currency stability, it restored investor confidence.
- Corporate earnings explosion: Record profits in 2023–2024 signal genuine fundamental strength, not just speculation.
- Foreign inflows returning: Highest FIPI in a decade shows global funds are noticing.
- Undervaluation catch-up: After years of underperformance relative to regional peers, the market was trading at compelling multiples.
- Structural tailwinds: Rising IPO activity, higher trading volumes, and improved liquidity all point to a maturing market.
Most importantly, the PSX has repeatedly proven its resilience. It delivered world-class returns during global crises (COVID-19), regional underperformance, and domestic political turbulence. When global markets were weak or modest, Pakistan often stood out.
Silver at 90%, Gold Miners at ~180%, PSX at 60%+ — Which Would You Pick?
The question isn’t academic. All three have crushed broader equity benchmarks over recent periods. Precious metals offer inflation protection and safe-haven appeal. Gold miners provide leveraged exposure to bullion prices.
But the PSX offers something neither can match: exposure to a frontier market undergoing a multi-year economic turnaround, backed by record corporate profits, improving macros, and historically cheap valuations.
History shows the PSX can deliver explosive returns precisely when sentiment is mixed — exactly the environment we have today.
