Islamabad, Feb 12: Pakistani equities are seeing a surge in interest from some of the world’s largest asset managers, following the Pakistan Stock Exchange’s (PSX) exceptional 84 percent growth last year, making it the top-performing market globally, according to Bloomberg.
Prominent firms like BlackRock Inc. and Eaton Vance Corp. have not only re-entered the market but also increased their investments. In December 2024, BlackRock’s Frontiers Investment Trust allocated 5 percent of its portfolio to Pakistani stocks after nearly two years of inactivity. Similarly, Eaton Vance reentered the market in mid-2024, while other firms such as Legal & General Investment Management Limited and Evli Fund Management Company have also upped their stakes in Pakistan.
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Intermarket Securities Ltd. has projected a 40 percent gain for the KSE-100 Index in 2025, highlighting growing optimism among investors. A portfolio manager at Morgan Stanley Investment Management Inc. pointed to strong earnings growth as one of the main drivers of this bullish outlook.
However, there are still concerns that could impact investor confidence. Political instability remains a risk, and Pakistan’s downgrade to frontier market status by FTSE Russell in September 2024 contributed to net foreign selling by the end of the year.
Despite these challenges, fund managers remain optimistic about the long-term prospects of Pakistan’s equity market. They believe that if the country can manage its current account deficit, it could spark a multi-year rally, attracting sustained foreign investment.
