Karachi, November 19, 2025 – Pakistan’s benchmark KSE-100 Index has soared nearly 40% year-to-date in 2025, powered largely by retail investors who are pouring money into equities as real estate remains stagnant and bank deposit rates fall, Bloomberg reported on Wednesday.
Daily trading volumes crossed $200 million in October – the highest since 2017 – while inflows into local equity mutual funds accelerated sharply. By September, stocks accounted for almost 16% of total assets under management, according to the Mutual Funds Association of Pakistan.
“We’re now seeing a liquidity-led rally,” said Mohammed Sohail, CEO of Topline Securities. “Unless that liquidity finds a new avenue, the markets will likely stay strong.”
The rally follows Pakistan’s narrow escape from sovereign default in 2023, with recent credit rating upgrades from S&P and Fitch restoring investor confidence. Improved ties with the United States, spearheaded by Army Chief Field Marshal Asim Munir, have also bolstered sentiment.
Foreign investors remain cautious, but domestic individuals are filling the gap. “After years of political musical chairs, the country finally has stability that could last,” said Mattias Martinsson, CIO at Sweden’s Tundra Fonder.
Risks persist: inflation surged unexpectedly in October and fresh tensions with India or Afghanistan could reverse gains. Yet analysts believe the structural shift toward equities is only beginning.