Islamabad, Dec 22: Pakistan’s financial markets have shown remarkable resilience, delivering a 35% return in both rupee and US dollar terms since September 2024. This recovery has been driven by substantial net inflows into local mutual funds, underscoring a shift in investor sentiment toward equities.
Data from Topline Securities reveals that mutual funds have aggressively engaged in net buying, with inflows amounting to $207 million (Rs. 58 billion). This trend reflects a strategic pivot from fixed-income instruments to equities, fueled by falling yields on government treasury bills.
Yields on 6-month and 12-month Treasury Bills, which peaked at 24.51% and 24.73% in September 2023, have dropped to 11.9% and 12.2%, respectively, as of December 19, 2024. This sharp decline has made equities a more attractive investment option, encouraging fund managers and investors to reallocate their portfolios.
The Pakistan Stock Exchange (PSX) also demonstrated its recovery strength by rebounding after consecutive sell-off sessions earlier in the week. The benchmark KSE-100 index, which faced a steep drop of over 8,500 points on Wednesday and Thursday, rallied strongly on Friday. The index closed at 109,513 points, marking a gain of 3,238 points (2.96%) from the previous day.
The current momentum indicates growing investor confidence in Pakistan’s equity markets, supported by favorable macroeconomic indicators and improved liquidity. This shift from fixed income to equities not only signals optimism but also highlights the evolving dynamics of Pakistan’s investment landscape.
