PSX sets new record as KSE-100 closes above 62,000 mark

Bulls continued to run high at the Pakistan Stock Exchange (PSX) on Monday as the benchmark KSE-100 Index crossed the 62,000 level for the first time.

At 02:30 pm, the index gained 1221.36 points or 1.94% to touch the highest level of 62,912.61 points, driven by strong buying in index-heavy shares such as oil and gas exploration companies, banks, and auto assemblers.

Finally, the benchmark index closed at the 62,493.05 level, adding 801.80 points or 1.3% to its value as compared to the previous close of 61,691.25.

The market sentiment was boosted by a recent staff-level agreement between Pakistan and the International Monetary Fund (IMF) on the first review under the $3 billion Stand-By Arrangement (SBA). The agreement paved the way for releasing the second tranche of $700 million to Pakistan.

According to a latest report by the Ministry of Finance, the PSX is experiencing a bullish wave due to a favourable IMF review and a consistent monetary policy stance.

The report, titled “Monthly Economic Update and Outlook for November” and released on Sunday, stated that “Pakistan’s economy is on a gradual but promising path to recovery.”

The report also observed that the economic activity is increasing due to the pace of economic revival initiatives.

“The market sentiment is influenced by positive economic signals and recovery indicators.

“The market confidence is boosted by the consistent monetary policy stance and the successful IMF staff review in November,” the report added.

The investors were also encouraged by the improvement in the country’s financial indicators, such as the extension of $3 billion deposit by Saudi Arabia, the expected $2 billion inflow from the World Bank in FY24, the above-target tax collection by the Federal Board of Revenue (FBR), and the relatively stable rupee.

The market experts believe that the interest rates have peaked and are likely to decline from 2024, which would attract more flows to the equity market. They also expect the corporate earnings to improve in the coming quarters, reflecting the economic recovery.

The PSX has seen a phenomenal rise of nearly 17% and the highest foreign investment in six years of $34.5 million in November 2023, indicating the strong confidence of investors in the country’s economic revival.

This was the second-highest monthly return in percentage terms in over a decade, only behind the Covid’s abnormal return in April 2020.

The surge in Pakistan’s stock market rally has been a pivotal factor in the 50 percent increase in the benchmark index since late June, making it the world’s second-best performer during this period, following Argentina.