KARACHI: The Pakis­tan Stock Exchange (PSX) made history on Friday by crossing the 90,000-barrier intraday, driven by an aggressive buying spree fuelled by an improved economic outlook amid solid hopes for a fourth straight cut in the interest rate early next month.

Topline Securities Ltd Chief Executive Officer Mohammed Sohail said the PSX has achieved one of its best performances, soaring from 38,000 to 90,000 points — a remarkable 137 per cent gain in less than two years.

“This strong recovery, moving from fears of default to visible signs of stability, has allowed bold and patient investors to recoup their losses from the past few years. Even after this, the market average price-to-earnings multiple is 4-5x compared to the historical average of 7-8x,” he added.

“Such a rapid and significant comeback was last witnessed in 2010, in the aftermath of the global financial crisis, when the market more than doubled within two years. Likewise, after 9/11 in 2002, Pakistan equities demonstrated similarly extraordinary gains,” Mr Sohail recalled.

PM says robust PSX performance result of economic stability

Ahsan Mehanti of Arif Habib Corporation said stocks closed to a new all-time high led by selected blue chips in oil, banking, and fertiliser sectors based on strong financial results and an expected significant cut in the SBP policy rate next week.

He added that the finance minister’s affirmation of privatising state-owned enterprises, rationalising PSDP, the $1bn sought for the IMF climate fund, and surging foreign exchange reserves catalysed bullish activity at the PSX.

Value-hunting pushed the index to an intraday re­c­ord of 90,593.61 an inc­rease of 1,647.63 points. How­ever, late session pro­fit-taking trimmed some early gains, but the index settled at a record 89,993.99 after adding 1,047.98 points or 1.18pc, entering its record-breaking spree to the fourth straight session.

However, the market participation fell 8.19pc to 695.54 million shares, but the traded value rose 5.06pc to Rs37.87bn day-on-day.

Govt takes credit

Meanwhile, crediting his economic team for a remarkable PSX performance, Prime Minister Shehbaz Sharif felicitated the nation as the KSE 100 index breached the historic mark of 90,000 points.

In a statement issued by the PM Office on Friday, Mr Sheh­baz said the gradual incre­ase in the stock market since March reflected gro­w­ing investor confidence in the government policies.

“Such a swift surge in Pakistan’s stock market after 14 years is the result of untiring efforts of the economic team,” the premier said.

He attributed the 36pc increase in the stock market since March to a significant reduction in inflation and overall economic stability to the efforts of the economic team.

He said the inflation had eased from 38pc to 6.9pc while the current account had also been in surplus for the last two months.

Similarly, the prime min­ister emphasised that revising the contracts with the Independent Pow­er Producers (IPPs) was also initiated to provide maximum facilitation to the power consumers.

Furthermore, he said that the long-term $7bn IMF facility would improve the economy.

Stocks contributing significantly to the traded vol­ume included Fauji Foods (57.56m shares), K-Electric (41.39m sha­res), Sui Southern Gas Company Ltd (38.03m shares), Fauji Cement (31.55m shares) and WorldCall Telecom (26.01m shares).

The shares registering the most significant incr­ea­ses in their prices in absolute terms were Raf­han Maize (Rs371.44), Uni­lever Foods (Rs229.44), Bata Pakistan (Rs112.61), Siemens Pakistan (Rs101.34) Abbott Laboratories (Rs81.81).

Foreigners remained net sellers and sold shares worth $3.03m.

Published in Dawn, October 26th, 2024