After lagging for the last few years, Pakistan Equities outperformed major asset classes in 2023. The benchmark KSE 100 Index provided a gain of 53% (Jan 01, 2023, till Dec 22, 2023), with four trading sessions left in 2023. This gain is inclusive of dividends received during this period.

Another favourite investment for local Pakistanis has been the US Dollar in the last few years. In 2023, it returned 25%, gaining from Rs226 to Rs283 in the interbank market and 21% from Rs236 to Rs285 in the open market. If this amount is invested in a 1-year term deposit at the beginning of the year, the gain would have increased to 29% at an interbank dollar and 25% at the open market (assuming a return of 4% on USD deposits).

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

Gold that provided an above-average return in the last few years to local investors posted decent gains. In 2023, it gained from Rs157,836/10 grams to Rs186,900/10 grams, providing a profit of 18%. In the international market, it also increased from US$1,826/ounce on Dec 30, 2022, to US$2,065/ounce on Dec 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% gain in 2023. We assumed investment in 3 month T-Bills (which was actively traded) being reinvested every 3 months.

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% in 2023 while National Savings 3 year Special Saving Certificate (SSC) provided a gain of 13%. Local AMCs’ money market funds generated an average return of 20% in 2023.

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

Courtesy – Topline Research