• Delivers 150pc return in just 17 months
• Posts annual return of 21pc in rupee terms and 7.7pc in dollar terms over five years
• Concerns persist over political instability, rising utility costs, deteriorating security

KARACHI: The Pakistan Stock Exchange (PSX) achi­eved a historic milestone on Thursday, crossing the 100,000 mark for the first time despite a weakening rupee, security challenges and rising business costs.

The bullish sentiment was driven by an improved economic outlook and expectations of another significant interest rate cut early next month. Inflation, which has been declining sharply, added to market optimism.

The record close came just two days after the PSX had experienced its largest-ever single-day loss of 3,506 points due to panic selling triggered by a PTI protest in Islamabad.

However, the market rebounded strongly the following day, recording an unprecedented rally of 4,695 points after the abrupt and violent conclusion of the protest eased concerns about political instability.

On Thursday, the benchmark KSE-100 index surged 1,271 points to an intraday peak of 100,540.29 before settling at a record closing level of 100,082.77, adding 813.52 points (0.82 per cent) day-on-day.

The KMI-30 index climbed by 2,437.74 points to close at 147,220.79, while the KSE All-Share Index rose by 691.64 points to finish at 63,083.14.

Topline Securities CEO Mohammed Sohail attributed the rally to economic stabilisation efforts, which have steered the country from a near-default situation to gradual recovery. He noted a remarkable 150pc return in the market, with the index rising from 40,000 to 100,000 in just 17 months.

“A new IMF loan coupled with fiscal and monetary discipline is improving investor sentiment,” Mr Sohail said, adding that the faster-than-exp­ected decline in inflation and interest rates has increased liquidity in the market.

The Ministry of Finance’s projection of inflation between 5.8pc and 6.8pc for November played a catalyst role in the new record close, he added.

Despite the surge, Mr Sohail pointed out that the market is still trading at a price-to-earnings multiple of 5x, compared to its historical average of 7x.

Concerns persist

While the market celebrated the milestone, concerns over political instability, rising utility costs, and deteriorating security conditions persisted.

Big businesses and multinationals represented by the Karachi Chamber of Commerce and Pakistan Business Council warned that these issues were prompting industrialists to relocate their operations abroad.

Ahsan Mehanti of Arif Habib Corporation highlighted that speculations about a significant policy rate cut by the State Bank of Pakistan, following the government’s reduction of short-term bond yields by 70 basis points, also contributed to the market rally.

‘Proud moment’

Sindh Governor Kamran Tessori visited the PSX to celebrate the achievement and congratulate management on the milestone.

Meanwhile, PSX Managing Director and Chief Executive Farrukh H. Sabzwari said the 100,000 mark was a proud moment and a testament to the trust of investors and the progress of the nation’s economy.

He said that over the past five years, the PSX had delivered an annual return of 20.9pc in rupee terms and 7.7pc in dollar terms, underscoring its resilience and appeal.

“This milestone demonstrates the potential of the capital market, and the focus is on driving sustainable growth, working towards increasing the market depth, and ensuring it supports the broader economic objectives of the country,” he said.

“Expanding retail investor participation is a key priority, as it will foster inclusivity and resilience, enabling the market to grow alongside the nation’s economy,” he added.

Key contributors

Major contributors to the index’s rise on Thursday included Pakistan Petroleum, Habib Bank, Oil and Gas Development Company, Lucky Cement and TRG Pakistan, collectively adding 629 points.

Trading volume rose by 10.2pc to 1.2 billion shares, while the traded value increased to Rs39.7bn.

Stocks with the highest trading volumes included the Bank of Punjab (179.22 million shares), K-Electric (64.86m shares), Bank Makramah (60.29m shares), Pace Pakistan (55.35m shares), and Hascol Petroleum (42.73m shares).

Shares registering significant gains in absolute terms included Unilever Foods (Rs126.71), Service Industries (Rs51.21), Mahmood Textile (Rs49.50), Packages Ltd (Rs35.79), and Abbott Laboratories (Rs28.82).

Published in Dawn, November 29th, 2024