Is it a good time to invest in stock market Pakistan?

Pakistan’s stock market is one of the most rapidly growing markets in the world. The Karachi Stock Exchange 100 (KSE100) Index, which is a benchmark for measuring performance of Pakistani stocks, has increased from 9,451 points on July 1, 2013 to 43,711 points as on July 1st 2017 - an increase of 369%. The KSE100 Index comprises 101 stocks and its market capitalization was $73.5 billion as on July 1st 2017. The following are some factors that make it a good time to invest in Pakistan’s stock market:

1) Economic growth: Pakistan’s GDP has been growing at a rate of over 5% per year for the past few years and is expected to grow at 6-7% per year in the coming years. This high economic growth provides impetus to companies operating in various sectors resulting in higher profits and dividends paid out to shareholders.

2) Low inflation: Inflation has remained low averaging around 4-5% per year during the past few years which provides stability and predictability necessary for long term investment decisions.

3) Strong currency: The Pakistani Rupee (PKR) has been appreciating against major currencies such as US Dollar (USD), British Pound Sterling (GBP), Euro (EUR), Australian Dollar (AUD), Canadian Dollar etc., making investments in Pakistani stocks even more lucrative from a foreign investor’s perspective. For example, if an investor had invested Rs 100,000/- ($975 approx.) into PKR denominated assets 3 years ago he would have received Rs 171,906/- ($1681 approx.) back today taking into account appreciation of PKR against USD during this period .