Pakistan Strategy – Asset class returns of Pakistan in 2024Equites outperformed other asset classes
ISLAMABAD: Pakistan Equities outperformed major asset classes in 2024. The benchmark KSE 100 Index provided a gain of 75% (Jan 01, 2024 till Dec 20, 2024) with 6 trading sessions left in 2024. This gain is inclusive of dividends received during this period.
Gold has also posted a decent gain, recording the third-largest increase. In 2024 it gained from Rs189,386/10 grams to Rs234,311/10 grams providing a profit of 24%. In international market it also increased from US$2,092/ounce on Dec 29, 2023 to US$2,617/ounce on Dec 20, 2024.
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Another favourite investment for local Pakistanis has been US Dollar in last few years. In 2024 it provided a negative return of 1% declining from Rs282 to Rs278 in the interbank market compared to return of 24% and 28% in 2023 and 2022, respectively. However, if this amount had been invested in a 1-year term deposit at the beginning of the year, the gain would have been 1-4%, assuming a return of 2-5% on US Dollar deposits.
Many investors moved to fixed income and low risk avenues in 2024 due to high interest rates. Within fixed income market, average bank saving rate remained 18% in 2024 while National Savings 3 year Special Saving Certificate (SSC) provided a gain of 17%. Local AMCs’ money market funds generated an average return of 19% in 2024.
Similarly, holders of the Naya Pakistan PKR Certificate under the Roshan Digital Account (RDA) also earned a 22% return in PKR terms.
Another widely discussed investment avenue has been government PIBs and T-Bills. Amid a tightening monetary policy, the government has raised interest rates to record highs. As a result, investors in PIBs earned a 27% gain in 2024. Similarly, investors in T-Bills earned a 21% gain in 2024. We assumed investments in 3-month T-Bills (which were actively traded), reinvested every three months. In the 1-Year T-Bill, investors also earned a 21% return in 2024.
Many investors also invested in the property market. According to Zameen.com, prices of commercial and residential plots in Lahore declined by 11%, while house prices increased by 14% in 2024. However, in Karachi, prices of commercial plots declined by 10%, while residential plot prices and house prices increased by 5-7%.
