Shares at PSX rally 600 points on improving macroeconomic outlook

Published October 29, 2024
Bullish momentum witnessed at the Pakistan Stock Exchange (PSX) on Tuesday  — PSX data portal
Bullish momentum witnessed at the Pakistan Stock Exchange (PSX) on Tuesday — PSX data portal

Bulls continued their stampede on the trade floor on Tuesday as shares at Pakistan Stock Exchange (PSX) gained more than 800 points to cross the 91,000 milestone in intraday trade.

The benchmark KSE-100 index surged 819.09 points, or 0.91 per cent, to reach 91,014.60 points from the previous close of 90,195.51 at 11:25am. Finally, the index closed at 90,864.09, up 668.58 or 0.74pc, from the previous close.

Tahir Abbas, director equities at Arif Habib Limited, noted that the PSX had “shown impressive gains recently, driven by a combination of improved macroeconomic indicators, a stabilised exchange rate and growing investor confidence following positive government policy initiatives”.

“The recent easing of inflationary pressures and declining interest rates have also contributed to increased liquidity, encouraging investors to take fresh positions in equities,” he added.

Yousuf M. Farooq, director research at Chase Securities, attributed the gains to “constant inflow from mutual funds on conversions from fixed income”.

“Plus result season and declining receivables of Exploration companies has caused a rally over the last month,” he said, adding that the market was “rerating and adjusting for earnings”.

Shahbaz Ashraf, chief investment officer at FRIM Ventures, a Karachi-based investment company, said, “The market is on a surge led by lower inflation numbers, declining interest, robust profitability of companies listed at the PSX, rupee stability, favorable external outlook and importantly cheap valuations.”

“It is pertinent to note PSX is one of the best performing market globally in CY24,” he noted, adding that the near-term trigger for the market remained the upcoming Monetary Policy Committee (MPC) meeting next week where he expected the interest rate to come off by 200 to 250 basis points.

Meanwhile, Awais Ashraf, director research at AKD Securities, highlighted that the bullish momentum was also maintained due to expectations investment commitments during Prime Minister Shehbaz Sharif’s visit to Saudi Arabia.

Earlier, the Foreign Office had confirmed that Prime Minister Shehbaz Sharif will depart for Saudi Arabia today to attend the 8th Edition of the Future Investment Initiative (FII) being held in Riyadh from 29 to 30 October.

According to the statement, the FII serves as an important platform for countries to showcase their economic strength, draw foreign investments, and engage in dialogue to shape a sustainable future.

“Falling fixed income yields have also contributed to increased equity inflows, as stocks are trading at relatively attractive valuations in terms of price-to-earnings ratios and dividend yields,” he noted.

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