A number of companies with market capitalizations exceeding Rs200 billion are looking to invest in the Pakistan Stock Exchange (PSX) after a remarkable rally in 2024, according to a leading U.S. publication.

Bloomberg reported that this surge in market activity has attracted the attention of prominent firms, signaling strong confidence in the country’s economic recovery.

Industry experts believe that the influx of investments from these major players could further enhance market stability and growth.

The PSX’s impressive performance has been driven by various factors, including improved economic indicators and positive investor sentiment.

As these companies prepare to enter the market, stakeholders anticipate that this could lead to increased liquidity and more robust trading activities on the exchange.

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The report said BlackRock’s Frontiers Investment Trust has allocated 5% of its portfolio to Pakistani stocks as of December 2024, marking its first involvement in nearly two years. Similarly, Eaton Vance returned to the market in mid-2024, and both Legal & General Investment Management Limited and Evli Fund Management Company have increased their holdings.

Intermarket Securities Ltd predicted a 40% gain for the KSE-100 Index this year, indicating a growing sense of confidence among investors.

A portfolio manager at Morgan Stanley Investment Management Inc. noted that strong earnings growth is a significant factor driving the anticipated market rally.

Despite this optimism, political uncertainty poses a challenge. Additionally, Pakistan’s downgrade to frontier market status by FTSE Russell in September resulted in net foreign selling in late 2024.

Nevertheless, fund managers remain optimistic, stating that if Pakistan can effectively manage its current account deficit, the market could experience a multi-year rally.