Khashif Talks Unlock Knowledge & Explore with Khashif Talks!
Shares at the Pakistan Stock Exchange (PSX) traded positively on Friday, with the KSE-100 benchmark index climbing over 400 points in intraday trading before closing in the green. The index increased by 138.55 points, or 0.18%, to settle at 78,488.21 points, up from the previous close of 78,349.66.
Market Drivers and Performance
The initial surge in the market was attributed to expectations of rebalancing inflows by Morgan Stanley Capital International (MSCI), a key provider of global indices for passive investments. Mohammed Sohail, Chief Executive of Topline Securities, highlighted that this anticipation created a strong momentum at the market’s opening.
Additionally, traders were keenly awaiting the release of the Consumer Price Index (CPI) data, scheduled for Monday. The market expects August’s CPI to be around 10%, a decrease from July’s year-on-year rise of 11.1%.
Awais Ashraf, Director of Research at AKD Securities, noted that the bullish momentum was further “strengthened following Moody’s rating upgrade,” which saw Pakistan’s rating improved to Caa2 with a “positive” outlook. This upgrade reflected improving macroeconomic conditions and moderately better government liquidity and external positions.
Impact of Moody’s Rating Upgrade and Economic Indicators
The market’s rally began on Thursday after Moody’s upgraded Pakistan’s credit rating, which had been a significant driver of positive sentiment. The rating agency cited “improving macroeconomic conditions and moderately better government liquidity and external positions” as reasons for its decision. This upgrade alleviated some concerns about Pakistan’s economic stability, helping to boost investor confidence.
Abdul Azeem, Head of Research at Al Habib Capital Markets, stated that Friday began with a “positive sentiment,” fueled by increased foreign exchange reserves reported by the State Bank of Pakistan (SBP) and stronger-than-expected corporate earnings. He also pointed out that stocks like EFERT, FFC, MTL, NBP, and COLG contributed a cumulative 290.6 points to the index.
Most Actively Traded Stocks and Market Volumes
HASCOL emerged as the most actively traded stock of the day, with a volume of 63.11 million shares. The total trading volume for the day was 680.81 million shares, and the total traded value stood at Rs21.19 billion.
The market’s bullish trajectory was also amplified by the Economic Coordination Committee’s (ECC) recent approval of an incentive scheme to boost foreign remittances, which eased concerns over external financing pressures. This package, aimed at enhancing remittances through official channels, further contributed to the positive market sentiment.
Looking Ahead: Key Indicators to Watch
Investors are closely watching the upcoming release of the CPI data, which will provide insights into inflation trends and potential adjustments in monetary policy. Market participants are also keeping an eye on further developments regarding foreign exchange reserves, corporate earnings, and global economic conditions that may influence the PSX in the coming days.
