Global asset managers are increasingly interested in Pakistan’s stock market, with some of the world’s leading investment firms, including BlackRock and Eaton Vance, reentering the country’s $50 billion market after a stellar year for stocks.
Bloomberg reported that Pakistan’s stock market saw a remarkable 84% return in 2024, attracting positive attention from international money managers. Attractive valuations and a stabilizing economy have improved the outlook for local stocks, with Intermarket Securities predicting a 40% gain for the KSE-100 Index this year.
Steven Quattry, portfolio manager at Morgan Stanley Investment Management, said that the case for investing in Pakistan is clear, citing strong earnings growth as a key factor supporting the market rally.
The surge in the Pakistan Stock Exchange (PSX) in 2024 was driven by Pakistan’s agreement with the International Monetary Fund (IMF) for a $7 billion bailout deal, which has helped boost investor confidence.
The optimism was also recognized by Fitch Ratings, which acknowledged Pakistan’s progress in restoring economic stability and rebuilding external buffers. Despite concerns over external liquidity, the agency upgraded Pakistan’s long-term foreign-currency issuer default rating (IDR) to CCC+ in 2024.
Foreign investment interest has been growing, with companies such as BlackRock and Eaton Vance reentering the market. Legal & General Investment Management and Evli Fund Management have also raised their stakes in Pakistani stocks.
Despite the growing foreign investor interest, challenges remain, particularly the country’s fragile political situation. However, experts remain optimistic about Pakistan’s stock market due to improving external finances and foreign exchange reserves. If the country manages its current account deficit, investors anticipate a multi-year rally in the market.
