There is a visible disconnect between two statistics routinely uploaded on the Finance Division’s website in the monthly Outlook and Update dating back to the time the incumbent government was installed in March 2024: a buoyant domestic stock market reflecting keen interest of local market players and a gloomy picture of portfolio investment inflows by foreign market players.

The Pakistan Stock Exchange (PSX) has shown a consistent upward trend since the incumbent government took over the reins of control – a trend that continued in August 2025 as noted in the Finance Division’s uploaded August Economic Update and Outlook: (i) on 27 August 2024 PSX was at 78,084 rising to an impressive 147,497 on 27 August 2025 – a positive change of 88.89 percent; and (ii) market capitalization (defined as the market value of a publicly traded company’s outstanding shares calculated by multiplying the current share price by the total number of outstanding shares) at 10,424 trillion rupees in 27 August 2024 against 17,529 trillion rupees on 27 August 2025 - a rise of 68.16 percent.

The PSX declined on 5 May 2025 and plunged by 6.32 percent following Indian missile strikes on 7 May, prompting a halt in trading on 8 May. KSE-100 then began an upward trajectory and quickly recovered losses by 12 May, as hostilities ceased, and thenceforth has continued to reach historical highs with minor downward fluctuations.

Foreign portfolio investment however has rarely kept pace with local market sentiment. In 2024-25, foreign portfolio investment was negative 650.2 million dollars - negative 44.6 million dollars in July 2025, the first month of the current fiscal year.

The discount rate higher than the regional average, that attracts foreign portfolio investors, has yet to play its role in this........

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