Posted 12/18/2023, 2:12:02 AM
Pakistani Stocks Surge But Sustainability Depends on Reforms
- The KSE-100 index has risen sharply recently after years of flat or declining performance, playing catch-up to inflation and historic valuation averages
- Despite the increase, valuations remain below historic averages in terms of price-to-earnings ratios
- Interest rates and government borrowing costs play a key role in determining if the bull run is sustainable
- Political and economic stability and reforms are needed to provide a base for lasting equity market gains
- If dysfunctional policies continue, the market may revert to depressed levels as the economy's risk premium stays high