The inventory market staged a strong rebound on Friday, breaking a two-session shedding streak and signalling a robust restoration in investor sentiment. Renewed shopping for momentum surged as buyers seized worth alternatives after enduring a interval of intensified promoting strain.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index rose by 1,246.93 factors, or 1.13%, throughout early buying and selling, reaching an intraday excessive of 111,670.25.
“Market is rebounding after declining for 2 classes. Seems profit-taking/correction is completed in the intervening time,” stated Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company.
The rally got here amid notable financial updates and coverage bulletins. Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial revealed a staggering Rs7.1 trillion tax hole, with Rs2.4 trillion attributed to earnings tax shortfalls.
Concurrently, Finance Minister Muhammad Aurangzeb reiterated the federal government’s dedication to rising the tax-to-GDP ratio from 9-10% to 13.5% . The Tax Laws (Amendment) Bill, 2024 goals to impose stricter restrictions on non-filers, barring them from buying high-value property like automobiles over 800cc and costly properties or conducting giant monetary transactions.
Despite these coverage developments, exterior financial pressures persist.
The State Bank of Pakistan (SBP) reported a $228 million decline in international change reserves, decreasing the entire to $11.85 billion as of December 20, with mixed reserves, together with industrial banks, dropping by $261 million to $16.372 billion.
However, this marks a considerable enchancment from the dangerously low ranges of $2.9 billion in February 2023, supported by a $200 billion fee minimize by the SBP that strengthened macroeconomic fundamentals.
Trade and funding information additionally supplied encouraging indicators of financial resilience. Exports rose by 12.57% to $13.691 billion through the first 5 months of FY2024-25, in comparison with $12.162 billion in the identical interval final yr. Exports to the EU and the broader Asian area totaled $4.8 billion every, whereas shipments to the US, Pakistan’s largest buying and selling associate, elevated by 14% to $2.4 billion.
Conversely, exports to China declined by 14%. Significant development was recorded in exports to the UAE and Afghanistan, which surged by 35% and 42%, respectively. Foreign direct funding (FDI) additionally elevated by 31% year-on-year to $1.124 billion throughout the identical interval, with $219 million recorded in November.
Other macroeconomic indicators mirror optimistic momentum. Pakistan recorded a present account surplus of $729 million in November, the biggest in a decade, reversing the $148 million deficit recorded in November 2023. Over the primary 5 months of FY2024-25, the present account surplus reached $944 million, a pointy turnaround from the $1.67 billion deficit recorded throughout the identical interval final yr.
Additionally, the nation’s credit score default swap (CDS) spreads have tightened by 88%, indicating decreased credit score threat and improved investor confidence.
