The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index predicted to reach 81,000 level by December 2024, driven by renewed optimism amid improved economic indicators, per a “strategy” paper by a brokerage house.
AHL Predicted That KSE-100 Index Will Hit 81,000 Points Mark
In its “Pakistan Investment Strategy Report 2023,” released on Monday, Arif Habib Limited (AHL) predicted that the KSE-100 index would close at 81,259 points by December 2024, representing a 32% increase from the index closing on December 1, 2023.
“We anticipate robust growth across all the sectors, projecting double-digit earnings growth for the majority.
Our outlook for KSE100 indicates an expected 17.2% earnings growth in 2024,” said AHL.
The PSX is currently experiencing a buying frenzy, thanks to increased purchases from both domestic and foreign investors.
KSE-100 Index Crossed 62,000 Points Mark 1st Time on Monday
The benchmark KSE-100 Index reached 62,493 on Monday, marking the first time in history that it has crossed the 62,000 mark.
AHL’s report upheld a positive economic outlook for FY24, projecting a robust ~3.33% GDP growth in FY24, in contrast to a 0.17% contraction in FY23.
“Secondly, we expect inflationary pressure to ease substantially over the next 6-12 months resulting in CPI inflation decelerating to 24% in FY24.”
“Lastly, we anticipate an accommodative monetary policy stance, starting the first quarter of CY24, which shall catalyze accelerated economic activity in the latter part of the current fiscal year and more importantly in the 2H2024,” the report said.
According to it, this would increase even more to 4.58% in FY25.
AHL’s Strategy Report
According to AHL’s strategy report, there has a resurgence of foreign buying in the PSX, and investors expected to remain interested in the market due to an IMF program and exceptionally attractive valuations.
Moreover, we project a foreign capital inflow of $200-300 million in 2024, with potential for the actual amount to exceed this range, highlighted the AHL report.
However, according to AHL’s report, regarding politics, there is a tangible feeling of hope and excitement about the possibility of a coalition government emerging as a catalyst for political stability in the next election, which is set to take place in February 2024.
“Having said all the above, we do not rule out any street agitation and protests post elections as usually witnessed in the country as results rejected widely. That may shake sentiment in the short term.
“Over the medium to long term horizon, we view that the PSX is set to usher in a fresh era of long-awaited re-rating and value realization,” AHL said.
External Debt
The report focused on the external side and noted that the external account still in a precarious position, with $87.4 billion in repayment obligations for FY24–26.
In contrast, the government aims to meet its funding needs through a combination of multilateral flows, private and bilateral debt, and both.
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