The capital market achieved one other milestone to open the week because the KSE-100 Index surpassed the 110,000-point mark for the primary time, pushed by investor confidence in bettering financial circumstances and easing inflation.
Initially, the market confronted a pointy decline, shedding over 1,000 factors throughout early buying and selling due to issues over potential authorities tax measures on banks’ income. However, it staged a rebound later within the session.
The Pakistan Stock Exchange’s (PSX) benchmark index gained 1,195.03 factors, or 1.1%, reaching an intraday excessive of 110,248.98. The session additionally noticed a low of 107,902.66 earlier than altering trajectory.
“News that the federal government has arrange a committee to think about growing taxation on banks’ income has dampened sentiment,” stated Muhammad Saad Ali, Director of Research at Intermarket Securities Ltd. “Most banks are down over 4% already. Banks led the latest leg of the rally, and a few of these returns will likely be pulled again within the interim.”
The authorities is trying to tax financial institution income derived from investments in authorities securities. A seven-member committee, led by Deputy Prime Minister Ishaq Dar, has been fashioned to overview the authorized framework of the banking sector’s advance-to-deposit ratio (ADR) and to foster consensus with banks.
The committee is predicted to finalise suggestions by December 31 to make sure income targets are met and suggest measures to encourage private-sector lending.
Global components additionally weighed in the marketplace. Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities cited “a worldwide equities selloff, international outflows, and issues over tax shortfalls and IMF goal slippages” as catalysts for bearish exercise.
Macroeconomic developments proceed to help long-term optimism. Inflation dropped to 4.9% in November, the bottom since April 2018. Saudi Arabia prolonged its $3 billion deposit for one more 12 months, strengthening Pakistan’s international reserves.
Trade agreements price $560 million with Saudi Arabia and a 25-month excessive in petroleum gross sales additional sign rising financial exercise. Additionally, the federal government raised Rs353 billion by means of an public sale of Ijarah Sukuk, boosting liquidity.
Prime Minister Shehbaz Sharif celebrated latest financial milestones, together with weekly inflation dropping to three.57%, the bottom in six years. He attributed these achievements to the federal government’s efforts to stabilise the financial system and highlighted rising remittances, elevated investments, and stronger diplomatic ties.
PM Shehbaz stated that the nation was quickly shifting towards progress after attaining financial stability, reiterating his dedication to decreasing hardships and fostering industrial progress, employment, and international funding.
Finance Minister Muhammad Aurangzeb shared a equally optimistic outlook, projecting remittances to exceed $35 billion by FY 2024-25. Addressing the Overseas Chamber of Commerce and Industry (OICCI), he mentioned ongoing reforms, together with closing 900 faux petrol pumps, selling native merchandise, and addressing personal sector challenges.
He additionally clarified that there are not any talks with the IMF about imposing gross sales tax on petroleum merchandise.
Analysts stay assured within the PSX’s long-term prospects, supported by easing inflation and strong macroeconomic indicators.
As the State Bank of Pakistan’s financial coverage assembly approaches on December 16, expectations of a fee minimize and continued reforms are more likely to form the market’s future trajectory.
