PSX returns second-highest among global frontier markets in 2025

Pakistan’s benchmark KSE-100 index emerged as the world’s second-best performing frontier market in calendar year 2025, delivering a 51% return and closing at a new record high, according to market data released this week.

The strong showing marked the third consecutive year of double-digit gains for the index, following returns of 55% in 2023 and 84% in 2024. Only Romania outperformed Pakistan among frontier markets during 2025.

Over the past three years, the KSE-100 has posted an average annual return of 64%, placing it among the top-performing equity markets globally during that period. In dollar terms, the market delivered cumulative returns of 249% over the three-year span, a level unmatched by any other market on a comparable basis.

The rally also underscored equities’ outperformance relative to most other domestic asset classes. Over the same period, real estate delivered returns of 17%, Pakistan Investment Bonds returned 12%, treasury bills 12%, Defense Savings Certificates 11%, and bank deposits 9%.

Gold was the only major asset class to outperform equities, posting gains of 65%.

Market analysts said the performance highlights the depth of long-term growth in Pakistani equities despite intermittent volatility. Historical data show sustained returns across multiple investment horizons, with average annual gains of 23% over 30 years, 27% over 25 years, 21% over 20 years, 23% over 15 years, 22% over 10 years and 37% over the past five years.

Despite short-term fluctuations, the KSE-100’s long-term record points to resilience and strong capital appreciation, reinforcing its position as a leading frontier market for global investors.