(Bloomberg) -- Pakistan’s stocks are expected to advance by more than a quarter by the end of next year as the nation’s economy shows improvement under loan program with the International Monetary Fund and the currency stabilizes, according to two brokerage houses.
The benchmark KSE-100 Index is forecast to increase to 127,000 points by December 2025, or a 34% rise, from 94,704 points it closed on Friday, according to Topline Securities Ltd. in a report announced on Nov. 16. Arif Habib Ltd. targets index to reach 120,000 points, a gain of 27%.
“The stage is set for a potential market re-rating with declining interest rates, a stable rupee, and improving macroeconomic indicators,” Karachi-based brokerage Arif Habib commented in a report.
Pakistan’s economy has stabilized with inflation easing from record levels that has allowed the central bank to cut the interest rate for four straight meetings to 15%, the lowest in two years. The key index advanced as much as 0.6% on Monday, taking its gains to more than 50% this year, the second best performer globally, according to data compiled by Bloomberg.
The equity market will be offering a 37% return including 10% dividend yield by the end of 2025 because of economic stability and falling bond yields, Karachi-based Topline said in a separate report.
Pakistan is also increasingly attracting the attention of foreign investors, particularly in its debt and equity markets, said Arif Habib.
©2024 Bloomberg L.P.