PSX: A Remarkable Performance in July 2023

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In July 2023, the Pakistan Stock Exchange (PSX) showcased exceptional performance, positioning itself as one of the best-performing stock markets globally. This month was marked by a series of positive developments that propelled the PSX to soar by over 16 percent, attracting attention from investors worldwide. Let’s delve into the key factors that contributed to this remarkable achievement.

The IMF Stand-by Arrangement and Sovereign Rating Upgrade

At the beginning of July, the Pakistani government secured a significant Stand-by Arrangement (SBA) facility of $3 billion from the International Monetary Fund (IMF). A considerable portion of this amount, $1.2 billion, was expeditiously disbursed. This IMF deal proved to be pivotal for Pakistan, leading to an upgrade in its sovereign rating by Fitch from CCC- to CCC. The improved rating instilled confidence in investors and set the stage for further growth in the stock market.

Boosted Forex Reserves and Current Account Surplus

Following the IMF’s support, the State Bank of Pakistan experienced substantial inflows and rollovers from allied nations, resulting in a notable increase in the country’s forex reserves. By the end of July, the forex reserves reached an impressive level of $8.2 billion. Moreover, Pakistan achieved a fourth consecutive monthly Current Account Surplus, amounting to $334 million in June 2023. These positive economic indicators contributed to the surge in investor confidence and market sentiment.

MoU with Saudi Arabia: A Game-Changing Refinery Project

One of the significant milestones in July was the signing of a Memorandum of Understanding (MoU) between five Pakistani state-owned enterprises and Saudi Arabia. This agreement paved the way for the execution of a substantial $10 billion refinery project within Pakistan. The project not only promises economic growth but also strengthens bilateral relations between the two countries. The announcement of this collaboration further fueled optimism among investors, leading to a surge in the stock market.

Surpassing the 48,000 Points Mark

As a result of these positive developments and the optimistic expectation of resolving circular debt, the local bourse experienced an unprecedented surge, surpassing the 48,000 points mark. This level had not been witnessed since August 23, 2021, making it a significant milestone for the PSX. The benchmark KSE-100 index displayed remarkable growth, closing at 48,035 points. This represented a substantial increase of 6,582 points, equivalent to 15.9 percent on a month-on-month (MoM) basis. In fact, this was the highest monthly return since April 20.

Increased Trading Activity and Foreign Investments

July 2023 witnessed a surge in trading activity, with average daily volumes settling at 384 million shares, reflecting a 127 percent increase compared to the previous month. Additionally, the average daily traded value rose by 149 percent to $41 million. Foreign investors also displayed a renewed interest in the Pakistani stock market, purchasing shares worth $14.9 million. The sectors that attracted the most foreign investment were Banks ($8.6 million), Technology & Communications ($2.9 million), and Cements ($2.4 million). However, there was a net selling of $2.8 million and $0.9 million in Other sectors and Power, respectively.

Impact on the Rupee Exchange Rate

While the PSX experienced a remarkable performance in July, the Pakistani rupee faced some challenges. The month ended with the rupee recording losses against the US dollar. The fluctuations in the exchange rate can be attributed to various factors, including market dynamics and external influences. It is important to note that the performance of the stock market and the currency exchange rate are interconnected, and changes in one can impact the other.


The remarkable performance of the Pakistan Stock Exchange (PSX) in July 2023 positioned it as one of the best-performing stock markets globally. The positive developments, including the IMF Stand-by Arrangement, the upgrading of Pakistan’s sovereign rating, increased forex reserves, and the signing of the MoU

Saqib Raja

Saqib Raja

Chairman -The Millennium Group of Companies

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