- Pakistan Stock Exchange (PSX) sees record gain after FY25 budget announcement.
- The KSE-100 index surges by over 3,400 points, reaching an all-time high of 76,208.16.
- Investors were relieved by the unchanged tax treatment for capital gains and dividends.
The KSE-100 index surpassed the 76,000 mark and closed at an all-time high level of 76,208.16, marking a remarkable increase of 3,410.73 points, or 4.7 percent, compared to the previous day's closing.
Today's surge represents the largest day-over-day gain in the history of the PSX. The previous record was set on July 3, 2024, with an increase of 2,446 points.
The market had experienced a downturn over the past 12 sessions amid concerns about potential changes in the tax treatment of income from capital gains and dividends. This led to a 4 percent decline, equivalent to 3,186 points.
However, the budget announcement brought relief to investors as the government did not implement the anticipated tax changes, easing fears and boosting market sentiment. Individual investors, who contribute significantly to daily trading activity (value), particularly welcomed this development.
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In a recent report, brokerage house Topline Securities expressed optimism about the market's outlook, provided the budget is successfully approved in accordance with IMF guidelines. They expect the market price-to-earnings (PE) ratio to increase from the current 3.4x to a historic forward PE of 6.93x within three years.
The report also projects a forward PE of 4.6x by June 2025, with an index target of 106,000, offering a return of 46 percent. Similarly, the index target for December 2024 is set at 87,000, providing a return of 20 percent based on these projections.
