KARACHI: The Pakistan Stock Exchange (PSX) continued its record-breaking spree on Friday and surpassed the remarkable milestone of 59,000 points, reaching an all-time high of over 59,500 points due to economic optimism.
The benchmark KSE-100 Index hit a record high of 59,502 points, rising by 1% or 602 points during the early trading hours of Friday, up from Thursday’s close of 58,900 points.
With this, the index cumulatively surged 12.5% or 6,626 points in the past three weeks to date, or since the market surpassed the six-year-old record high level of 52,876 points on November 3, 2023.
At the closure of the day’s first trading session, the intra-day gains reduced by 499 points to 59,398 points on profit selling.
While speaking to The Express Tribune, Topline Securities Deputy Head of Research Sunny Kumar said the market has maintained the momentum mainly due to two factors. “One is investors’ optimism on economic revival in the wake of IMF’s staff-level approval for its next loan tranche of $700 million to Pakistan following the successful conclusion of the first economic review on November 15, 2023.”
“Secondly, stock prices have remained low despite the index having kept surpassing major milestones almost every day these days.”
Today’s rally at PSX is being led by technology stocks in terms of volumes. Besides, some power companies and banking stocks also attracted investors’ interest and remained among the top performers volume-wise. Kumar added his brokerage house has projected the benchmark to hit 75,000 points over the next 13 months in December 2024.
The forecast is based on three major developments in the near future, including a potential cut in interest rate by seven percentage points to 15% by the end of December 2024 from a record high of 22% at present.
Second, general elections are expected to be held on time in February 2024.
Third, the newly elected government would acquire a new and larger IMF loan programme to push the economy into a growth phase from the current stabilization phase, Kumar added.
The market, however, may come under selling pressure if Pakistan faces difficulty in getting its foreign loans rolled over and refinanced.
It faces challenges in making foreign debt repayments on time and if the country’s current account deficit starts to increase from the current level in the first four months of the current fiscal year. –Agencies
