FDI Momentum Propels
The Pakistan Stock Exchange witnessed a historic milestone on Tuesday as the benchmark KSE-100 Index surged past the 60,000 barrier.
This remarkable achievement was fueled by the signing of several multi-billion dollar Memorandums of Understanding (MoUs) between Pakistan and the United Arab Emirates (UAE) a day earlier.
Caretaker Prime Minister Anwaarul Haq Kakar, currently on a visit to the UAE, highlighted the significance of these MoUs in enhancing economic and strategic cooperation between the two nations.
The agreements marked a new era of bilateral cooperation, setting the stage for positive developments in various sectors.
As of 10:59 am, the KSE-100 Index recorded a notable gain, reaching 60,659.14 from the previous closing of 59,811.34. This uptrend, representing a gain of 1.42%, is attributed to several factors, with foreign direct investment (FDI) playing a pivotal role.
The FDI influx is expected to revitalize the economy by fostering the growth of existing businesses and establishing new ventures.
This, in turn, will address the challenges posed by the prevailing cost-of-living crisis exacerbated by record-high inflation. Job creation, especially for those affected by economic hardships, is anticipated as a positive outcome.
FDI Momentum Propels:
The positive impact of FDI is already evident in the stock market, particularly in the energy and related sectors. Share prices of listed companies in these areas are experiencing a welcome surge, marking a departure from years of undervaluation.
The current economic landscape, characterized by the highest interest rates in Pakistan’s history (currently at 22%), has posed challenges to the economy. Investors sought refuge in the US dollar, contributing to the weakening of the rupee.
The government’s policy stance on currency devaluation, coupled with the International Monetary Fund’s emphasis on expanding the tax net and enhancing revenue collection, aims to strengthen the economy.
This shift towards a more documented economy is expected to make informal sectors less lucrative, encouraging investment in the stock market.
FDI Momentum Propels :As these transformative measures unfold, Pakistan is poised to attract more investors, addressing its historically low ratio of population participation in the global stock market.
