Calendar year 2023: Posting hefty gains of 53pc, PSX outperforms major asset classes

KARACHI: Pakistan equities performed exceptionally well and provided hefty gains of 53 percent outperforming other major asset classes during calendar year 2023.

Investment in US dollar, Naya Pakistan US$ Certificate under Roshan Digital Account (RDA), gold, and T-bills also remained attractive investment avenues for local investors, experts said.

“After lagging behind for last few years, Pakistan Equities outperformed major asset classes in 2023 and the benchmark KSE-100 Index provided a gain of 53 percent (January 01, 2023 till December 22, 2023) with 04 trading sessions left in 2023,” Muhammad Sohail, leading analyst said in a research report. This gain is inclusive of dividends received during this period.

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According to this report, another favourite investment for local Pakistanis has been US Dollar in last few years. In the calendar year 2023 investment in US Dollar provided a return of 25 percent gaining from Rs226 to Rs283 in the interbank market and 21 percent from Rs236 to Rs285 in open market.

“If this amount is invested in a 01 year term deposit at the beginning of year the gain would have increased to 29 percent at interbank dollar and 25 percent at open market (assuming a return of 04 percent on USD deposits),” he said.

Similarly holder of Naya Pakistan US$ Certificate under Roshan Digital Account (RDA) also made 33 percent in PKR terms due to falling PKR value, the report said.

Gold that provided an above average returns in last few years to local investors posted decent gain. In 2023 it gained from Rs157,836/10 grams to Rs186,900/10 grams providing a profit of 18 percent. In international market it also increased from $1,826/ounce on December 30, 2022 to $2,065/ounce on December 22, 2023.

Another widely discussed investment avenue has been Government T-Bills. Amid tightening monetary policy, government has to raise interest rate rates to record high. As a result investors in T-Bill made 23 percent gain in 2023. “We assumed investment in 03 month T-Bills (which was actively traded) being reinvested every 03 months,” Sohail said.

According to the report, many investors moved to fixed income low risk avenues in 2023 due to high rates. Within fixed income market, average bank saving rate remained 17 percent in 2023 while National Savings 03 year Special Saving Certificate (SSC) provided a gain of 13 percent. Local AMCs’ money market funds generated an average return of 20 percent in 2023.

“Though many investors remained out of the property market, but as per Zeeman.com, real estate (Houses, Residential and Commercial Plots) in Karachi went up 6-29 percent in 2023.”

Copyright Business Recorder, 2023