Retail Investor Growth Driving Pakistan's Bull Market

by Riaz Haq

Nov 24

Pakistan's benchmark index KSE-100 has soared nearly 40% so far in 2025, becoming Asia's best performing market, thanks largely to phenomenal growth of retail investors. About 36,000 new trading accounts in the South Asian country were opened in the September quarter, compared to 23,600 new registrations just three months ago, according to Topline Securities, a brokerage house in Pakistan.  Broad and deep participation in capital markets is essential for economic growth and wealth distribution in any country. 

Pakistan's KSE-100 Index Chart. Source: Bloomberg

Increase in trading accounts is helping inflows into local equity mutual funds as well. As much as 16% of total assets managed by asset management companies is now invested in stocks at the end of September, up from 9% at the start of the year, according to data from the Mutual Funds Association of Pakistan, as recently reported by Bloomberg. 

Pakistan Investment Accounts Growth. Source: Bloomberg

Massive growth in retail investors is being enabled by increasing digital penetration in Pakistan. The country now boasts 152 million broadband subscribers, bringing the digital penetration to 61.1% as of October 2025, according to the Pakistan Telecommunications Authority (PTA).  Pakistan ranks among the world's top 10 nations in terms of Internet and smartphone users. Most of the brokerage houses now offer online trading accounts and mobile apps for retail investors. 

Pakistan Telecommunications Indicators. Source: PTA

KSE-100 companies profitability has grown over 13% in 2025. Stocks in the KSE-100 index have an average dividend yield of approximately 5.81% to 5.9%, with a historical average closer to 6.11%. The current yield is considered attractive, especially when compared to its 15-year average price-to-earnings (P/E) ratio of 8.59x, which is a significant discount to other emerging markets which are currently trading at a P/E ratio of 15.86x. 

Sharp Drop in Pakistan's Debt Default Risk. Source: Bloomberg

Pakistan’s debt default risk has seen a sharp drop as the country’s economy has stabilized under an IMF program. The nation's GDP for the April-June period grew at 5.66%, higher than the 3.1% expansion predicted by economists in a Bloomberg survey.  The large scale manufacturing (LSM) sector saw 4.08% growth in the first quarter of the current fiscal year. 

Pakistan is experiencing rapid growth in Fintech (financial technology) applications. The country's journey to build a digital public infrastructure (DPI) began in March 2000 with the establishment of NADRA, the National Database and Registration Authority. The Gates Foundation defines DPI as follows: "DPI is a digital network that enables countries to safely and efficiently deliver economic opportunities and social services to all residents. DPI can be compared to roads, which form a physical network that connects people and provides access to a huge range of goods and services...... strong DPI has three foundational systems—identity, payments, and data exchange—that together can make life easier in important ways".

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  • Riaz Haq

    Pakistan Set for Up to 16 IPOs as Three-Year Stock Rally Tops 300%

    https://www.bloomberg.com/news/articles/2025-12-10/pakistan-set-for...

    Pakistan's stock rally and surging retail participation are drawing companies back to the equity market, setting up what bankers say could be a banner year for initial public offerings in 2026.
    Two of the country's prominent investment banks have a combined pipeline of as many as 16 IPOs over the next seven months, with companies tapping the market to help fund plans to increase production capacity.
    Current market valuations are attractive for raising equity, with stability in the Pakistani rupee and a favorable interest-rate environment providing strong tailwinds for capital markets, according to Shahid Ali Habib.



    Pakistan’s blistering stock rally and surging retail participation are drawing companies back to the equity market, setting up what bankers say could be a banner year for initial public offerings in 2026.

    Two of the country’s prominent investment banks — Arif Habib Ltd. and Ktrade Securities Ltd. — have a combined pipeline of as many as 16 IPOs over the next seven months. That compares with 11 listings in the past three years.

    The benchmark KSE-100 Index has gained over 47% this year, one of the best performers in the world, helped by an uptick of interest by domestic investors, extending a bull market into a third year. With valuations now reaching long-term averages, offerings are set for a comeback.

    “Current market valuations are attractive for raising equity,” said Shahid Ali Habib, chief executive officer at Arif Habib, which expects to bring as many as eight offerings through June. Stability in the Pakistani rupee and a favorable interest-rate environment provide strong tailwinds for capital markets, he said.

    Some companies are tapping the market to help fund plans to increase production capacity. They’re anticipating a pickup in economic growth, according to Habib, who said the upcoming offerings include firms from consumer, pharmaceuticals and auto sectors, among others.

    Ktrade Securities expects to manage public offerings of at least six companies in the next six months. JS Global Capital Ltd. plans to list as many as six companies next year, said Chief Executive Officer Khalil Usmani.

    Companies in the pipeline include Service Long March Tyres Ltd., a joint venture between Servis Group and China’s Chaoyang Long March, which is set to raise as much as 6.5 billion Pakistani rupees ($23.2 million) by April, potentially making its the country’s biggest IPO in years, according to Habib. Saraaf, a commodity sourcing startup that raised 1.5 billion Pakistani rupee ($5.4 million) in Shark Tank in 2024 is also planning to come to market and Matco Foods Ltd. plans to spin off its Falak Foods unit, according to Omar Salah Ahmed, a managing director at Ktrade.

    Despite a fourfold increase in equity prices over the past three years, primary markets stayed dormant. Growing confidence among retail investors is now reversing that, creating the liquidity companies need to test the IPO market again.

    Nearly 36,000 new trading accounts in the South Asian country were opened in the September quarter, compared with 23,600 new registrations three months back, according to the most recent data available from Topline Securities. Trading activity has also increased, with daily turnover on the Pakistan Stock Exchange topping $200 million in October, the highest since 2017, data compiled by Bloomberg show.

    Read more: Pakistan’s Mom-and-Pop Investors Drive 40% Rally in Stocks

    “I think it’s very likely 2026 to be a record year for IPOs,” Ktrade’s Ahmed said by phone. “Valuations are finally becoming attractive for sponsors to actually consider listing their entities.”

    on Wednesday

  • Riaz Haq

    Pakistan Set for Up to 16 IPOs as Three-Year Stock Rally Tops 300%

    https://www.bloomberg.com/news/articles/2025-12-10/pakistan-set-for...


    Still, participation in equity markets among households in Pakistan remains well below levels in countries in the region like Sri Lanka and especially India, where IPOs hit a record 1.77 trillion rupees ($19.6 billion) this year. And with the KSE-100 up more than 300% over three years, the market is showing signs of overheating: The index is trading at nearly 8 times forward earnings, compared with its long-term average of about 6.4 times.

    Foreign investors have also been far less enthusiastic than locals. They have been net sellers in nine of the past 11 years and pulled $321 million from Pakistan this year, the most since 2021.

    Pakistan’s economy is regaining ground after it came close to defaulting on its debt in 2023. S&P Global Ratings and Fitch Ratings upgraded the country’s ratings this year, citing improved fiscal management and reform momentum under Prime Minister Shehbaz Sharif’s International Monetary Fund-backed programs.

    In addition, efforts by Field Marshal Asim Munir, who is widely seen as the nation’s most powerful leader, to improve US ties have supported equities. Munir’s elevation to a new role until 2030 is also seen as prolonging stability.

    The International Monetary Fund’s executive board approved immediate disbursements of loan totalling $1.2 billion earlier this week after a review, helping shares gain for the fifth straight session on Wednesday.

    on Wednesday

  • Riaz Haq

    Pakistan's car sales rise 43 pct in first 5 months of fiscal year


    https://news.az/news/pakistan-s-car-sales-rise-43-pct-in-first-5-mo...

    Pakistan's passenger car sales recorded strong growth during the first five months of the current fiscal year, supported by improved economic sentiment, new model launches and better financing conditions, industry data showed on Thursday, News.az reports, citingXinhua.

    According to the Pakistan Automotive Manufacturers Association, car sales rose 43 percent year on year to 55,239 units from July to November in fiscal year 2025-26, compared with 38,597 units in the same period last year.

    In November alone, car sales reached 12,408 units, up more than 50 percent compared with the same month last year, though they declined 8 percent on a monthly basis.

    Sales of jeeps and pickups increased by 62 percent to 19,803 units in the first five months, while truck sales rose 101 percent to 2,753 units and bus sales grew 72 percent to 407 units. Motorcycles and rickshaws also posted growth of 32 percent, reaching 762,778 units.

    However, tractor sales continued to decline due to lower demand from farmers, who industry experts say are facing reduced agricultural output linked to climate-related challenges.

    34 minutes ago