Stocks at the Pakistan Stock Exchange (PSX) showed upward momentum in intraday trade on Monday, driven by expectations of lower inflation numbers and anticipation of a new loan deal with the International Monetary Fund (IMF).
The market opened on a positive note with the benchmark KSE-100 Index crossing the 79,000 level, for the second time in its history.
At 01:45 pm, the KSE-100 touched the day’s highest level of 79,536.22, gaining over 1,000 points as compared to the previous close.
Key sectors, including automobile assemblers, commercial banks, oil and gas exploration companies, OMCs, and refineries, witnessed across-the-board buying. Major stocks such as PSO, SHEL, SNGPL, SSGC, POL, HBL, MCB, and MEBL traded in the green.
The buying activity is attributed to market optimism that authorities in Islamabad will soon reach a staff-level agreement (SLA) with the International Monetary Fund (IMF).
At the day close, the benchmark index settled at 78,824.33 points, up by 379.37 or 0.48% from the previous close of 78,444.96 points.
As per a Bloomberg report, the PSX emerged as the best-performing equity market in the world during the fiscal year 2023-24. The KSE-100 Index closed the final session of FY2024-25 at 78,444.96 on Friday, compared to 41,452.69 in the previous fiscal year.
According to a brokerage report, the KSE-100 index posted its second-highest annual return of 89% in FY24 in rupee terms, while the return in USD terms was higher by 520 basis points at 95%, due to a ~3% appreciation in the PKR/USD exchange rate. The majority of this increase is attributed to the re-rating of the Price-to-Earnings (PE) multiple from 2.2-2.4x on June 30, 2023, to 3.94x on June 28, 2024.
Trading activity saw significant improvements, with average traded volumes in the cash and ready market increasing by 230% YoY and 26% QoQ to an average of 503 million shares per day. The average traded value rose by 337% YoY and 37% QoQ to Rs 20 billion per day during Q2 2024.
Foreign investors continued to buy into the Pakistan Stock Exchange (PSX) for the fourth consecutive quarter, with net inflows of $69 million in Q2 2024, the highest quarterly net inflow in 35 quarters. This was attributed to a restored investor confidence and an increase in Pakistan’s weight in the MSCI Frontier Markets Index to over 4%.
On the local side, mutual funds were major buyers with net purchases of $9.2 million, followed by insurance companies with $5.3 million and other corporations with $4.5 million. However, individuals and banks were net sellers, offloading $44 million and $27 million, respectively, in Q2 2024.
