In the realm of global equity markets, the Pakistan Stock Exchange (PSX) has scripted a remarkable success story for fiscal year 2023-24. This year, the PSX emerged as the best-performing equity market in the world, leaving a lasting impression with its benchmark KSE-100 Index closing at an impressive 78,444.96, a monumental rise from 41,452.69 at the end of the previous fiscal year. This translates to a staggering 89% annual return in local currency terms and an even more impressive 94% in USD terms, bolstered by the appreciation of the Pakistani Rupee (PKR) against the US Dollar. This extraordinary performance has catapulted PSX to the top, ahead of global competitors like Turkey and Romania, whose markets saw returns of 48.2% and 42.7% in USD terms, respectively. The remarkable increase in the KSE-100 Index is largely credited to a significant re-rating of the Price to Earnings (PE) ratio. From a low of 2.2-2.4x in June 2023, the PE ratio surged to 3.94x by June 2024. This re-rat

  In a nation where every rupee counts, the financial health of state-owned enterprises (SOEs) is of paramount importance. Yet, despite generating a staggering Rs12 trillion in annual revenue, Pakistan's SOEs remain a significant burden on the taxpayer. With the power sector leading in losses, these entities have been draining the nation’s resources and jeopardizing its economic stability. A closer look at the recently released Aggregate Annual Report on Federal SOEs for Fiscal Year 2023 by the Ministry of Finance sheds light on the pressing need for reform and privatization. A Snapshot of SOE Financial Performance According to the report, Pakistan’s SOEs collectively grossed Rs11.92 trillion in revenue in 2023, marking a 15% increase from the previous year. This growth, however, is primarily attributed to inflationary pressures rather than genuine performance improvement. While the oil and financial sectors drove this revenue surge, the SOEs’ financial health tells a different st

Auto financing in Pakistan experienced a significant decline for the 23rd consecutive month, standing at Rs233 billion in May 2024, marking a 22.5% year-on-year decrease and a 1.2% month-on-month drop. The decline highlights ongoing challenges within the automotive sector and raises concerns about the broader economic landscape. This blog explores the contributing factors to this trend, the potential impacts, and the future outlook for auto financing in Pakistan.   The Current Scenario   The Decline in Numbers   According to the State Bank of Pakistan(SBP) , the outstanding auto loans in May 2023 amounted to Rs300 billion. By May 2024, this figure had dwindled to Rs233 billion, reflecting a substantial decrease. The total decline from the peak of Rs368 billion in June 2022 to the present indicates a reduction of Rs135 billion. This trend underscores a persistent contraction in auto financing, driven by multiple economic factors.   Interest Rate Trends One of the primary facto