The inventory market endured continued promoting strain on Thursday, extending its downward trajectory from the earlier session as aggressive profit-taking intensified, compounded by heightened investor warning over rising international outflows.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index dropped 2,671.87 factors, or 2.41%, to a low of 108,398.42 throughout early buying and selling, extending losses from Wednesday’s historic single-day fall of three,790 factors, the most important point-wise decline in PSX historical past. The index closed Wednesday at 111,070.29 after a session marked by a pointy reversal from early beneficial properties.
Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, mentioned: “Stocks [are] bearish on issues for international outflows and cautious SBP coverage easing on prone a number of dangers.
Consolidation in blue-chip scrips, rupee instability, and weak international crude oil costs performed a catalyst position in bearish exercise.”
Data from the SBP confirmed a pointy rise in revenue and dividend repatriations by multinational corporations. Repatriations surged by 112% year-on-year to $1.128 billion in the course of the first 5 months of FY25, reflecting unrestricted greenback outflows amidst improved international trade reserves.
November alone accounted for $321.6 million, a 586% year-on-year improve, although this represented a 22.3% month-on-month decline because of the clearing of pending funds and decreased restrictions on capital outflows for international buyers.
Investor issues have been additionally heightened by the introduction of The Tax Laws (Amendment) Bill, 2024, which proposes stringent measures concentrating on non-filers to broaden the tax base.
Key provisions embody barring non-filers from buying autos above 800cc, property, and shares past sure limits. The proposed laws additionally restricts non-filers from opening financial institution accounts or making giant monetary transactions, whereas empowering the Federal Board of Revenue (FBR) to freeze financial institution accounts, seal properties, and block property transfers of non-compliant people.
These measures sparked fears of decreased shopper spending and liquidity within the banking sector, including to the bearish tone available in the market.
Despite the current downturn in equities, Pakistan’s macroeconomic fundamentals proceed to enhance, offering a optimistic backdrop for long-term investor confidence.
The present account posted a $729 million surplus in November, the most important month-to-month determine in almost a decade and the best since February 2015. For the primary 5 months of FY2025, the present account surplus stood at $944 million, in comparison with a deficit of $1.67 billion throughout the identical interval final 12 months. This turnaround was pushed by a discount within the commerce deficit, a decline within the companies deficit, and decreased curiosity and dividend repatriations.
Foreign direct funding (FDI) additionally confirmed development, growing by 31% year-on-year to $1.124 billion in the course of the first 5 months of FY2025, with vital contributions from China, Hong Kong, and the United Kingdom.
Meanwhile, remittances grew by 29% year-on-year in November, reaching $2.9 billion, bringing the entire for the primary 5 months of FY2025 to $14.8 billion. This development was supported by authorities incentives selling formal banking channels and secure international reserves, which now stand at $16.6 billion.
The SBP lately decreased the coverage price by 200 foundation factors, decreasing it to 13%. This marked the fifth consecutive price minimize as inflation dropped to 4.9% in November, the bottom since April 2018.
