The Pakistan Stock Exchange (PSX) witnessed a strong bullish trend on Thursday, as the benchmark KSE-100 Index broke the 64,000-mark barrier for the first time in its history.
The index was backed by economic revival initiatives, improved financial indicators, high investor confidence, and expected inflows in the form of the second tranche of $700 million from the International Monetary Fund (IMF).
According to the PSX website, the KSE-100 index closed at 64,718.07, gaining 800.35 points or 1.25% high as compared to the previous closing of 63,917.72.
During the intraday trade, the benchmark index reached its highest level of 64,958.10 points.
The market saw a strong demand for index-heavy sectors as investors were quite optimistic about the country’s economic recovery. Cement, chemical, commercial banks, fertiliser, OMCs and power generation and distribution sectors were among the top performers, as they contributed to the historic rise of the benchmark index.
According to the latest report by the Ministry of Finance, the PSX was 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”, stated that “Pakistan’s economy is on a gradual but promising path to recovery.” The report also observed that the economic activity was increasing due to the pace of economic revival initiatives.
The investor confidence was also boosted by the improvement in the country’s financial indicators, such as the extension of a $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 local currency.
The market experts believed that the interest rates had peaked and were likely to decline from 2024, which would attract more flows to the equity market. They also expected the corporate earnings to improve in the coming quarters, reflecting the economic recovery.
The PSX had 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 Covid’s abnormal return in April 2020.
The surge in Pakistan’s stock market rally had 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.
