Stocks sustained their record-setting tempo on Tuesday, summitting a brand new peak after hovering above the 96,000 mark for a short time, led by sturdy macroeconomic outlook and reassurances from the finance minister on financial coverage, taxation, and the International Monetary Fund (IMF) go to.
The Pakistan Stock Exchange’s (PSX) KSE-100 Shares Index soared by 860.99 factors or 0.91% to hit an intraday excessive of 95,856.66. During intraday buying and selling, euphoric buyers pushed the apex index to 96,036.48 factors, however late profit-taking prevented the market from sustaining that degree.
The session started on the earlier shut of 94,995.67, sustaining optimistic momentum fueled by sturdy performances in key sectors, together with telecommunication, banking, and power.
Stocks like Hascol Petroleum, Waves Home Appliances, and TPL Properties are among the many most actively traded, with vital beneficial properties reflecting retail and institutional participation.
Investor sentiment was lifted by Finance Minister Mohammad Aurangzeb’s assurance that the IMF current go to posed no risk to Pakistan’s $7 billion mortgage programme.
He confirmed that there have been no discussions of extra taxes, significantly for the salaried class or manufacturing sector.
Muhammad Saad Ali, Director Research at Intermarket Securities Ltd, commented, “Conclusion of IMF mission go to – with out the IMF demanding new tax measures or mini price range – is main optimistic in serving to the market to proceed the rally.”
“Liquidity out there could be very sturdy with institutional buyers being internet consumers given rates of interest have come off sharply and are prone to fall additional.”
“Market to date not a lot apprehensive concerning the PTI protest later in November,” he added.
Adding to the optimism, the federal government introduced a landmark choice permitting Exploration and Production (E&P) companies to promote 35% of future fuel discoveries to the personal sector, a transfer aimed toward mitigating round debt within the power sector.
The Implementation Framework for the amended E&P Policy 2012 will quickly be offered for closing approval, offering readability and alternatives for private-sector involvement.
The know-how sector additionally contributed to the optimistic market outlook, with remittances from info and communication know-how (ICT) exports rising 34.9% year-on-year to $1.206 billion throughout July-October 2024.
In October alone, export remittances reached $330 million, marking a 38.6% improve in comparison with the identical month final 12 months.
Sana Tawfik, Head of Research at Arif Habib Limited, highlighted the vital function of enhancing macroeconomic indicators, similar to inflation, in sustaining the bullish market. “Key indicators, similar to inflation, are displaying optimistic developments. Inflation is projected to common round 7.5% for FY25,” she stated.
“For November 2024, it’s anticipated to fall inside the vary of 4.5% to five%. This represents a major decline,” she famous.
The present account surplus added one other layer of confidence, with the State Bank of Pakistan (SBP) reporting a surplus of $349 million for October 2024—the third consecutive month-to-month surplus.
This enchancment is attributed to a 7% month-on-month and 24% year-on-year improve in remittances. Foreign trade reserves additionally reached a two-year excessive, bolstering confidence within the nation’s financial restoration.
Cumulatively, the present account surplus for the primary 4 months of FY25 stood at $218 million, in comparison with a deficit of $1.53 billion throughout the identical interval final 12 months.
Foreign Direct Investment (FDI) additionally demonstrated strong development, growing by 32% year-on-year to $904.3 million through the July-October interval.
October noticed a slight dip in FDI in comparison with the identical month final 12 months. Total overseas funding inflows for the interval reached $1.242 billion.
With reserves projected to cross $11 billion within the coming weeks, native mutual funds have actively shifted investments from fixed-income securities to equities, driving the benchmark index’s 20% surge since September.
Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, highlighted the optimistic macroeconomic elements, saying, “Stocks are bullish on studies of present account surplus.”
“Investors weighed surging overseas trade reserves and authorities choices over financial reforms for state-owned enterprises (SOE), impartial energy producers (IPPs), and power pricing.”
“Next triggers might be easing political noise amid protest calls by the opposition,” he added
Telecommunication and monetary shares led the rally on Monday, with PTCL (38.82 million shares traded) and Sui Southern Gas Company (48.77 million shares) among the many standout performers.
Analysts attributed the continued rally to structural reforms, strong company earnings, and the absence of a mini-budget.
The IMF’s acknowledgement of Pakistan’s progress in enhancing its tax-to-GDP ratio, coupled with the federal government’s give attention to state-owned enterprise reforms and IPP offers, has instilled confidence amongst buyers.
