PSX dominates global markets

The Pakistan Stock Exchange (PSX) ended the trading week on a historic note as the benchmark KSE-100 surged to an all-time high above 66,000 points. This record close was fueled by the visit of caretaker Prime Minister Anwaarul Haq Kakar, who marked the launch of a 30 billion rupee Ijara Sukuk. The index rose an impressive 4,532 points, or 7.3% week-on-week (WoW), to 66,223.63. The notable rise was attributed to the outstanding performance of key sectors including banking, fertilizers and exploration and production (E&P). Throughout the week, bullish sentiment dominated the trading floor, boosted by several encouraging factors. These included anticipation of the International Monetary Fund (IMF) executive board meeting on January 11 to approve a $700 million loan tranche. The prime minister’s remarks on improving Pakistan’s fiscal and external accounts, coupled with extensive foreign investor participation, high yields and a stable exchange rate, contributed to the rapid rise in the index. On Monday the index hit a record high on expectations of a free trade deal with the Gulf Cooperation Council (GCC) and measures to create a sovereign wealth fund. The next day, the stock market reached close to 63,000 points, on the back of a 9% month-on-month increase in oil sales and expectations of the imminent release of the IMF loan tranche. On Wednesday, stocks surged to new highs fueled by a positive economic outlook and a reduction in external debt, attracting investor interest in certain sectors. The next day, the PSX broke another record amid heavy trading, with news of a possible $1.5 billion Chinese investment in Pakistan Refinery Limited (PRL) inspiring market players to engage in big buying. In addition, investors were encouraged by Asian Development Bank (ADB) project financing of around $650 million for Pakistan. Friday’s outstanding performance pushed the KSE-100 to a new all-time high above 66,000 points, with significant strength drawn from Prime Minister Kakar’s visit to launch a Rs30 billion Ijara Sukuk. JS Research analyst Shagufta Irshad, in her review, observed that investor participation remained strong on the PSX as average daily turnover was 1,026 million shares, up 64% WoW. In this, net purchases from abroad again dominated, accumulating to $11 million during the week. Read: PSX surges as PM trip gives boost On the macro front, Consumer Price Index (CPI) inflation hit 29% in November 2023, while State Bank foreign reserves fell $237 million to 7.02 billions of dollars due to debt repayments. In other news, cement sales remained subdued in November, while urea prices rose at retail due to advance buying for the Rabi sowing season. “Pak Suzuki Motor Co (PSMC) depicted a volatile movement in share prices after the company notified the stock exchange about the minimum price of Rs 406 per share for voluntary delisting,” he said. “The lower-than-expected floor saw some correction in the share price, which later recovered.” On the political front, the Election Commission received funding from the finance ministry for election expenses and was expected to announce the election schedule next week, the JS analyst added. Arif Habib Limited, in its report, noted that the KSE-100 achieved a major milestone by hitting a new high of 66 thousand on strong sentiment leading up to the IMF board meeting scheduled for January 11, 2024 An agreement between Pakistan and Saudi Arabia on investment details during the week was expected to pave the way for the signing of a free trade agreement with the GCC in the future, it said. In other notable developments, oil sales jumped 9% month-on-month (MoM) in November 2023, while urea and DAP uptake saw healthy growth of 33% and 26% MoM, respectively. The Pakistani rupee closed at 283.87 against the US dollar, appreciating by Rs 1.09, or 0.38% WoW. Overall, the market closed at 66,224 points, up 4,532 points or +7.3% WoW, marking the highest weekly point return. Additionally, the KSE-100 became the world’s best performing market on a weekly basis. Sectorally positive contributions came from commercial banks (1,704 units), oil and gas exploration companies (997 units), fertilizers (387 units), oil and gas trading companies (333 units) and power generation (166 units). Foreign purchases totaled $11.2 million compared to a net purchase of $17.5 million the previous week. Published in The Express Tribune, December 10, 2023 Like business on Facebook, follow @TribuneBiz on Twitter to stay updated and join the conversation.

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