Stocks extend upward rally, KSE-100 closes above 93,000 mark

Stocks extended their upward rally at the Pakistan Stock Exchange (PSX) on Friday with the benchmark KSE-100 closing above the 93,000 mark for the first time in its history.

According to the PSx website, during the trading session, the index reach a high of 93,514.55 points and a low of 92,566.49 points. The total trading volume was 361,755,080 shares, with a market value of approximately PKR 21.5 billion.

At the day’s close, the KSE-100 Index closed at all-time high 93,291.68 points, marking an increase of 771.20 points or 0.83% from the previous close of 92,520.48 points.

Key sectors, including automobile assemblers, commercial banks, oil and gas exploration companies, power generation, and refineries, saw buying activity. Index-heavy stocks such as PRL, HUBCO, SNGPL, OGDC, MCB, and MEBL traded in positive territory.

In a positive development, Pakistan’s worker remittances surged 24% year-on-year (YoY) to reach $3.052 billion in October 2024, from $2.463 billion in the same month last year. 

According to the latest data released by the State Bank of Pakistan (SBP) on Friday, remittances rose by 7% month-on-month (MoM) in October, up from $2.86 billion in September. 

For the first four months of the fiscal year FY2024-25, total remittances surged to $11.8 billion, indicating a 35% increase compared to the $8.8 billion recorded during the same period last year.

On Thursday, Morgan Stanley Capital International (MSCI) Inc. added eight Pakistani companies to its Frontier Market (FM) Small Cap Index in its November review. 

The eight companies newly included in the MSCI FM Small Cap Index are Citi Pharma, Crescent Steel & Allied Products, Fast Cables, Flying Cement Company, Pakistan Oxygen, Shifa International Hospitals, Thatta Cement Company, and TRG Pakistan. 

Meanwhile, the IMF’s urgent mission is scheduled to visit Islamabad from November 11 to 15, to assess fiscal performance and discuss potential corrective measures, including the introduction of a mini-budget.

The PSX has been on a winning streak for some weeks mainly supported by increased investor confidence and improved economic indicators. This bullish momentum was further ignited by a 250 basis points (bps) rate cut by the central bank on Monday. 

The SBP reduced the key policy rate from 17.5% to 15%, surprising many economists as they were expecting the SBP to cut the policy rate by 200 basis points This was the fourth consecutive reduction since June 2024.

Last week, the PSX rose by 0.96% week-over-week, supported by continued monetary easing and the country’s first quarterly budget surplus in over 20 years, amounting to Rs 1.7 trillion in the first quarter of FY25, along with strong corporate earnings reports.

The government, however, missed two of the IMF’s quarterly targets: tax collection fell short by Rs 90 billion, and the provinces’ cash surplus target by Rs 182 billion. 

October’s headline inflation reached 7.2% year-over-year, while real interest rates remained comfortably above 10% at current policy rates. 

On the macroeconomic side, the trade deficit for October was $1.4 billion, with exports for the month rising 4.9% month-over-month to $2.97 billion.