KARACHI: In the first week of the new fiscal year, despite strike calls and growing resentment by economic stakeholders against the tax-heavy budget for 2024-25, the stock market turned in a robust performance. As a result, the index reached its all-time high, surpassing the 80,000 mark.

Ginners, exporters and the petroleum sector have expressed concerns about harsh tax measures that could impede economic growth. Despite this, the PSX started the week with extended gains, as equity investors were not affected by the newly implemented measures, which took effect on July 1.

Arif Habib Ltd (AHL) said the outgoing week marked the commencement of a new fiscal year, in which the market momentum remained bullish.

On the economic front, the CPI for June stood at 12.6pc, taking the FY24 average inflation to 23.4pc. Additionally, the SBP reserves witnessed a two-year high, reaching $9.4bn. Moreover, Pakistan’s trade deficit in FY24 decreased by 12.3pc year-on-year to $24.1bn.

Furthermore, the central government’s debt increased by 2.6pc month-on-month to Rs67.8 trillion in May. In addition, the local currency depreciated three paise or 0.01pc to Rs278.38 week-on-week.

As a result, the benchmark KSE 100 index settled at 80,213 points after gaining 1,768 points or 2.3pc week-on-week. Sector-wise positive contributions came from commercial banks (1,031 points), oil and gas exploration companies (175 points), fertiliser (158 points), oil and gas marketing companies (116 points), and cement (78 points). Meanwhile, the sectors that mainly contributed negatively were automobiles (39 points), chemical (26 points), miscellaneous (25 points), textile composite (15 points) and tobacco (11 points).

Foreigner buying continued during the outgoing week, clocking in at $7.7m compared to a net $2.5m last week. The average trading volume surged 23.8pc to 440m shares, while the average value traded jumped 31.3pc to $66m week-on-week.

According to AKD Securities Ltd, the market is expected to return its focus to negotiations with the IMF regarding the new Extended Fund Facility programme, becoming a key market trigger in the near term.

The rally is expected to continue amidst the market’s attractive valuations, with the forward P/E continuing to remain below 4.0x.

Published in Dawn, July 7th, 2024