Pakistan’s stock market has posted a remarkable 35% return in both rupee and US dollar terms since September 2024, fueled by substantial net inflows from local mutual funds. According to Topline Securities, these impressive gains are largely attributed to aggressive buying by mutual funds, which have pumped in US$ 207 million (approximately Rs. 58 billion) during this period. This influx is primarily driven by investors shifting their investments from fixed income assets to equities.
Topline Securities noted that the shift from fixed income to equities is largely a result of declining yields on fixed income instruments. Yields on 12-month and 6-month Treasury Bills, which had reached peaks of 24.73% and 24.51% respectively in September 2023, have since fallen by 1,253-1,261 basis points. As of December 19, 2024, these yields stand at 12.20% and 11.9%, making equities a more attractive investment option for funds and investors.
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Despite a turbulent week that saw the KSE-100 index lose over 8,500 points on Wednesday and Thursday due to sell-off pressures, the market ended on a high note. On Friday, the KSE-100 index surged by 3,238 points, closing at 109,513 points, a 2.96% increase from the previous session’s close.
