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Pakistan and IMF Prepare for Resilience and Sustainability Facility (RSF)

Aarooj Manzoor
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Pakistan and IMF Prepare for Resilience and Sustainability Facility (RSF)

Introduction

Pakistan and the International Monetary Fund (IMF) are making strides in preparatory work for the Resilience and Sustainability Facility (RSF). The RSF aims to address critical economic challenges while fostering long-term sustainability and resilience. This collaborative effort reflects Pakistan’s ongoing commitment to economic reforms and its relationship with the IMF.

What Is the Resilience and Sustainability Facility (RSF)?

Overview of RSF

The RSF is an initiative by the IMF designed to assist countries in addressing macroeconomic vulnerabilities while promoting sustainable and inclusive growth. For Pakistan, this facility represents an opportunity to strengthen its economic foundation amidst global and domestic challenges.

Why Is It Important for Pakistan?

Pakistan seeks $1 billion under the RSF, focusing on resilience-building measures, climate adaptation, and advancing structural reforms that ensure economic stability.

Recent Developments: IMF and Pakistan’s Engagement

1. Official Confirmation by IMF

Julie Kozack, Director of the IMF’s Communications Department, recently confirmed that preparatory discussions are underway for the RSF. The process involves detailed background work before the proposal can be presented to the IMF Executive Board for approval.

2. Context of the RSF Inquiry

Pakistan formally requested RSF funding to complement its ongoing economic reforms under the Extended Fund Facility (EFF).

IMF’s Extended Fund Facility and Its Priorities

1. Approval of the $7 Billion EFF

On September 25th, the IMF Executive Board approved a new 37-month $7 billion EFF arrangement for Pakistan.

2. Key Focus Areas

  • Strengthening policymaking processes
  • Building resilience against economic and climate shocks
  • Advancing inclusive and sustainable growth strategies

3. Semi-Annual Review Mechanism

The EFF requires biannual reviews, with a staff visit conducted from November 12th to 15th to monitor Pakistan’s progress and reaffirm commitments.

Key Challenges Addressed by the RSF

1. Revenue Shortfalls

IMF teams will assess Pakistan’s fiscal targets during the upcoming review mission, identifying areas needing improvement.

2. Climate and Economic Resilience

Pakistan’s economic vulnerability to climate change necessitates targeted reforms and infrastructure improvements.

3. Structural Reforms

The RSF will emphasize reforms to create a more robust and self-sustaining economic framework.

IMF’s Comments on Pakistan’s Progress

Encouraging Signals

Following the November staff visit, the IMF expressed optimism about Pakistan’s commitment to the EFF program, highlighting positive engagement with authorities.

Standard Practices

The staff visit served as a preparatory step for the semi-annual review, a customary procedure in IMF-supported programs.

Implications for Pakistan’s Economy

1. Strengthening International Confidence

Progress under the RSF could enhance Pakistan’s credibility in global markets, attracting investment and financial assistance.

2. Addressing Economic Vulnerabilities

From fiscal deficits to climate adaptation, the RSF provides a structured approach to tackling Pakistan’s pressing economic issues.

3. Long-Term Sustainability Goals

The RSF aligns with Pakistan’s broader objectives of achieving sustained, inclusive growth while addressing macroeconomic imbalances.

Conclusion

Pakistan’s preparatory work with the IMF on the RSF marks a significant step in its journey toward economic stability and sustainability. While challenges remain, the commitment to reforms and collaboration with international partners like the IMF reflect a promising path forward. With the potential to secure $1 billion in funding, the RSF could become a pivotal component in reshaping Pakistan’s economic landscape.

Gold Prices in Pakistan Soar by Rs. 2,200 Per Tola Amid Global Surge

Aarooj Manzoor
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0
Gold Prices in Pakistan Soar by Rs. 2,200 Per Tola Amid Global Surge

Gold Prices Surge Locally and Globally

Gold prices  in pakistan have witnessed a significant rise both internationally and within Pakistan, continuing an upward trajectory that has captivated market attention. On Saturday, the international bullion market reported an increase of $22 per ounce, pushing gold to a new high of $2,715 per ounce.

Local Markets Feel the Impact

The global surge has directly influenced local prices in Pakistan. The cost of gold per tola climbed by an impressive Rs. 2,200, reaching Rs. 282,700. Similarly, the price of 10 grams of gold rose by Rs. 1,857, bringing it to Rs. 242,370.

Steady Growth Fuels Optimism and Concerns

This rise reflects ongoing global economic shifts and heightened investor demand. Analysts suggest that if current conditions persist, the price of gold could climb further in the coming weeks.

Factors Driving the Increase

Global Economic Uncertainty

Economic uncertainty on a global scale has bolstered demand for gold as a secure asset. Inflationary pressures and geopolitical tensions are key contributors, influencing investor sentiment.

Market Volatility

Fluctuating currency values and shifts in monetary policies have also played a role. These factors make gold an attractive option for portfolio diversification.

How It Affects Consumers

Impact on Jewelry Buyers

For those looking to purchase jewelry, the increasing prices have added to costs, making gold a more luxurious commodity.

Investment Opportunities

On the flip side, gold’s rising value presents lucrative opportunities for investors, reinforcing its status as a reliable asset.

What Lies Ahead for Gold Prices?

Market experts forecast continued growth in gold prices, depending on global economic dynamics. As gold remains a safe haven during financial instability, its demand could sustain the upward trend.

Conclusion

Gold’s price surge highlights its significance in both global and local economies. While it brings challenges for buyers, it also underscores its enduring appeal as an investment. Monitoring market conditions will be key for those navigating this volatile landscape.

KSE-100 Index Hits Historic High of 99,091 Points

Khashif Sarfraz
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KSE-100 Index Hits Historic High of 99,091 Points

PSX Bull Run: KSE-100 Index Reaches Unprecedented High

The Pakistan Stock Exchange (PSX) witnessed a historic rally on Friday, with the KSE-100 index surging by 1,762.80 points (1.81%), reaching a record-breaking intra-day high of 99,091.19 points. This impressive performance extended the bullish momentum seen in recent sessions, showcasing growing investor confidence.

Key Drivers Behind the Surge

The record-breaking rally was fueled by optimism surrounding Pakistan’s macroeconomic outlook. Analysts cite several factors contributing to the market’s positive sentiment, including:

  • Economic reforms and fiscal policies bolstering investor confidence.
  • Strong buying activity in fertiliser stocks, particularly Fauji Fertiliser Company and Engro Fertilisers.
  • Rising foreign exchange reserves, improved remittances, and a current account surplus.
  • Speculation about privatisation of state enterprises and structural reforms.

Sector Performance

The fertiliser sector was the highlight of the session, with major contributors including:

  • Fauji Fertiliser Company (+10%)
  • Engro Fertilisers (+5.29%)
  • Engro Corporation (+4.12%)

Other sectors, such as pharmaceuticals, exploration and production (E&P), and technology, also drew significant investor interest.

Market Activity

The session saw 969.9 million shares traded, with a total value of Rs35.2 billion. Out of 457 companies traded, 249 stocks closed higher, while 167 fell, and 41 remained unchanged.

Top Volume Leaders

  1. WorldCall Telecom: 95.6 million shares (+Rs0.1 to close at Rs1.38).
  2. Pace Pakistan: 51.5 million shares (+Rs0.32 to close at Rs5.81).
  3. Kohinoor Spinning Mills: 48.3 million shares (-Rs0.58 to close at Rs8.40).

Looking Ahead

The KSE-100’s remarkable performance demonstrates the growing optimism in Pakistan’s stock market. With the 100,000-point milestone within reach, analysts recommend a buy-on-dips strategy, focusing on sectors like fertiliser, pharmaceuticals, E&P, and technology.

The PSX’s continued upward trajectory reflects a resilient market responding positively to economic improvements. However, sustained growth will require further reforms and stability in key economic indicators.

Gold Prices Surge by Rs2,500 in Pakistan; Global Prices Also Rise

Khashif Sarfraz
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Gold Prices Surge by Rs2,500 in Pakistan; Global Prices Also Rise

Gold prices saw a significant jump on Monday, impacting both the local and international markets.

In Pakistan’s local gold markets, the price of 24-carat gold surged by Rs2,500 per tola, bringing it to a new high of Rs269,900. Similarly, the price per 10 grams increased by Rs2,144, reaching Rs231,396.

On the international front, the price of gold per ounce rose by $25, reaching $2,587 in the global bullion market.

Silver Prices Hold Steady

While gold prices witnessed a sharp rise, the price of silver remained unchanged in Pakistan. The price of silver per tola stayed steady at Rs3,250, while the price per 10 grams remained at Rs2,786.

Recent Trends in Gold Prices

This increase comes after a slight decline in gold prices over the weekend. On Saturday, global gold prices had dipped by $3, bringing the price per ounce to $2,562. In the local market, the price of 24-carat gold fell by Rs300 per tola, dropping to Rs267,400.

Factors Driving the Surge

The recent surge in gold prices highlights continued fluctuations in both local and international markets. Factors such as global economic trends, currency valuation, and market demand often contribute to these changes.

Conclusion

As gold prices rise, they continue to attract attention from investors and consumers. Keeping a close eye on these fluctuations can help individuals make informed decisions about buying or selling gold. Stay updated for further insights into market trends.

Smog Crisis in Pakistan: The Urgent Need for Green Transport Solutions

Khashif Sarfraz
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Smog Crisis in Pakistan: The Urgent Need for Green Transport Solutions

As major cities around the world light up with festive decorations in November, urban centers in northern Pakistan prepare for a very different season—a season shrouded in hazardous smog. From November to February, millions face dangerous air pollution levels, with far-reaching health and economic consequences.

The smog season, Pakistan’s second-largest health threat after cardiovascular disease, sends thousands to hospitals every day. Children are among the hardest hit, suffering from respiratory illnesses and other pollution-related conditions.

Economic and Environmental Toll

The economic impact of smog is staggering. According to the World Bank, air pollution costs Pakistan over $22 billion annually, equivalent to 6% of GDP. The primary contributors include industrial emissions, stubble burning, and most significantly, vehicle emissions. Recent studies reveal that the 6 million vehicles in Lahore alone, including over 4 million motorcycles, account for 83% of the pollution.

As incomes and vehicle ownership rise, pollution levels are expected to worsen unless immediate action is taken.

The Green Transport Initiative: A Step Forward

To tackle this crisis, the Punjab government launched the Green Transport Project, aiming to introduce 1,000 electric buses and enforce stricter penalties on high-emission vehicles. However, experts believe these efforts fall short given the scale of the problem. A coordinated, long-term strategy involving both federal and provincial governments is essential.

Learning from Global Success: The Case of Beijing

Beijing, once labeled the “world’s smog capital,” offers a blueprint for combating urban air pollution. Ahead of the 2008 Olympics, China implemented strict air pollution controls, prioritizing electric public transport and limiting car use in city centers.

Today, battery electric and hybrid vehicles dominate Beijing’s roads, reducing PM2.5 pollution levels by two-thirds over a decade. This transformation highlights the potential of focused policies in tackling environmental challenges.

Pakistan’s Missed Opportunities in EV Adoption

Despite introducing an ambitious EV policy in 2019, Pakistan has made negligible progress. The policy aimed for 30% EV adoption by 2030, targeting 100,000 electric cars, 500,000 two- and three-wheelers, and 1,000 electric buses. Yet, five years later, less than 1% of these goals have been achieved.

Why has Pakistan fallen behind?

  1. Policy Implementation Gaps: Incentives to transition from fuel-intensive vehicles to EVs remain insufficient.
  2. Protectionist Auto Policies: Outdated localization policies benefit a few foreign companies while discouraging EV imports and local assembly.
  3. High Import Taxes: Heavy tariffs on built-up EVs prevent affordable models from entering the market.

Lessons from Thailand: A Forward-Looking Strategy

Thailand, known as the “Detroit of Asia,” demonstrates how effective policies can accelerate EV adoption. By lowering import taxes under the China-Asean Free Trade Agreement, Thailand has attracted $2 billion in EV investments, positioning itself as a regional export hub.

Pakistan, on the other hand, continues to spend billions importing fuel and assembling vehicles with outdated technology. These vehicles consume three times more energy than electric alternatives, worsening both the environment and the economy.

The Cost of Inaction

The consequences of Pakistan’s inaction are dire. Smog-related costs exceed $20 billion annually, in addition to billions spent on fuel imports. Urban centers in Punjab and Khyber Pakhtunkhwa are becoming increasingly unlivable due to pollution and declining quality of life.

The Way Forward

Pakistan needs an immediate policy overhaul to curb transport emissions and embrace sustainable solutions. Key actions include:

  • Expanding EV Incentives: Reduce import taxes and encourage local EV assembly.
  • Enhancing Public Transport: Invest in electric buses and mass transit systems.
  • Phasing Out High-Emission Vehicles: Implement stricter emissions standards.
  • Learning from Global Models: Adopt best practices from countries like China and Thailand.

Conclusion

Pakistan stands at a crossroads. With rising pollution levels and mounting economic losses, decisive action is the only way forward. Embracing green transport solutions and adopting a sustainable EV policy could transform the country’s urban centers and improve the lives of millions.

Pakistan Stock Market to See 27-37% Growth by 2025

Khashif Sarfraz
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0
Pakistan Stock Market to See 27-37% Growth by 2025

Pakistan’s stock market is gearing up for impressive growth in the next couple of years. Research houses have projected that the Pakistan Stock Exchange (PSX) will offer returns between 27% and 37% by December 2025. The benchmark KSE-100 index could hit a record high, rising to 120,000–127,000 points.

This bullish outlook comes on the back of improving macroeconomic conditions under the IMF loan programme. Arif Habib Limited, in its “Pakistan Strategy 2025” report, states that the declining interest rates, a stable rupee, and improving economic indicators are key factors setting the stage for a market rerating.

Key Drivers for Stock Market Growth

Several factors are contributing to the expected growth in the PSX:

  1. Foreign Investment: Pakistan is increasingly attracting foreign investment, especially in its debt and equity markets. This is fueling investor confidence and driving liquidity.
  2. IMF-backed Economic Reforms: Successful IMF reviews and fiscal reforms, such as the FY26 budget, will serve as major drivers for market growth. An upgrade in credit ratings will also open the door for new financing options, including Eurobonds and Sukuk.
  3. Privatization Plans: The privatization of state-owned enterprises (SOEs) like PIA and power distribution companies is expected to improve market sentiment and economic health. The Reko Diq deal also plays a significant role in bolstering market confidence.
  4. Performance of the PSX: The PSX has already shown strong performance, with the KSE-100 index delivering a return of almost 52% in 2024. It surged from 62,451 points in December 2023 to 94,764 points. Despite this, the index is still undervalued, presenting a great opportunity for investors.

Valuation and Market Outlook

The KSE-100 index is currently trading at a price-to-earnings (PE) ratio of 5.3, a 36.1% discount compared to its 10-year average of 8.3. This suggests there is substantial room for growth. The market capitalization-to-GDP ratio is also at a 34.3% discount, further indicating potential upside.

According to Arif Habib Limited, Pakistan’s GDP is expected to grow by 2.4% in FY25. They predict that inflation will stabilize at 7.5% and that the policy rate will decrease to 12% by June 2025. This environment is expected to support continued market growth.

Sector-wise Growth

Different sectors in Pakistan’s economy will contribute to the stock market’s positive performance:

  • Commercial Banks: Banks will focus on volumetric growth, but interest rate cuts may impact their earnings.
  • Oil and Gas Exploration: This sector is set to maintain stable earnings due to higher payouts and circular debt resolution.
  • Fertilizer Sector: With stable urea prices and higher margins, the fertilizer sector’s earnings are expected to grow by 11.4%.
  • Cement Sector: Thanks to a better power mix and low coal prices, the cement sector is projected to see a 32.1% growth in earnings.
  • Oil and Gas Marketing: Earnings are expected to rise by 39.1% as inventory losses reduce and margins improve.
  • Textile Sector: The global recovery in demand will support the textile sector, though higher taxes may limit profitability.
  • Technology Sector: A 39.3% growth in earnings is expected in technology, driven by innovation, digital solutions, and sustainable growth.
  • Auto Sector: Economic recovery and lower interest rates will drive auto demand, with electric vehicles becoming more prominent.

Conclusion

With improving macroeconomic indicators, foreign investment inflows, and sectoral growth, Pakistan’s stock market is poised for strong returns. The KSE-100 index could potentially rise to 120,000–127,000 points by the end of 2025, providing investors with an opportunity to earn returns between 27% and 37%.

These factors, alongside economic reforms, fiscal stability, and a favorable investment climate, position Pakistan as an attractive market for local and foreign investors. As the country continues its economic transformation, the PSX is expected to deliver strong, sustained growth, making it an essential part of Pakistan’s financial future.

Pakistan’s First AI Policy Set to Boost Cybersecurity and Digital Economy by 2025

Khashif Sarfraz
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Pakistan’s First AI Policy Set to Boost Cybersecurity and Digital Economy by 2025

In a major stride toward digital transformation, Pakistan is preparing to roll out its first-ever Artificial Intelligence (AI) Policy by early 2025. This ambitious policy focuses on integrating AI to strengthen cybersecurity across sectors, with capabilities to detect and respond to cyber threats in real-time, potentially averting critical data breaches. The AI policy aligns with Pakistan’s goal of becoming a “Digital Pakistan” and bolstering its digital economy.

The policy is being developed alongside the nation’s rapidly expanding digital public infrastructure. With these advancements, Pakistan aims to ascend the Global Cybersecurity Index, moving from its current top 40 ranking to a position within the top 10–15 ranks.

AI Policy and Cybersecurity Goals

Speaking at the ‘Cyber Threat Intelligence 2024’ conference, Syed Junaid Imam, Member IT, Ministry of Information Technology and Telecom, confirmed the ongoing efforts to draft Pakistan’s inaugural AI policy. He emphasized the critical role AI will play in cybersecurity, stating, “AI is essential for ensuring the safety of our cyberspace.” The conference, organized by Total Communications, highlighted that Pakistan’s improved cybersecurity ranking in 2024, moving to the top 40 countries from 79th place the previous year, is a testament to its progress but also a reminder of the journey ahead.

The Road to a Digital Economy

The AI policy and digital infrastructure initiatives reflect Pakistan’s commitment to strengthening its digital economy. Imam noted that cybersecurity is foundational to Pakistan’s economic growth and digital transformation. “A secure cyberspace is essential if we want to drive Pakistan’s digital economy,” he said. The government is deploying resources to establish a stable, AI-driven cybersecurity framework, ensuring that Pakistan’s digital ecosystem remains robust and resilient.

Key Developments in Digital Infrastructure

To further bolster cybersecurity, the government has established a national CERT (Computer/Cyber Emergency Response Team), with plans to expand by creating sectoral CERTs in sectors like telecom, banking, education, and at the provincial level. These teams will share intelligence and collaborate on threat detection, providing a unified defense against cyber threats. This move underscores Pakistan’s commitment to digital protection as it aims to foster a safe environment for economic growth and digitalization.

Collaboration for Enhanced Cybersecurity

The AI policy is being developed through collaboration among industry experts, private sector leaders, academia, and government representatives. This diverse committee aims to create a comprehensive framework that meets Pakistan’s unique cybersecurity and digital needs.

Asad Effendi, Founder & CEO of Secure Networks, noted that AI offers significant advantages in cybersecurity, allowing real-time detection and response to cyber threats, effectively protecting valuable data and information. Such AI-enabled measures are vital as Pakistan strengthens its defense against cyber attacks, especially as the country has become a primary target for cybercriminals.

Rising Cyber Threats in Pakistan

In 2023, cyber threats intensified against Pakistan’s digital infrastructure, with primary targets including educational institutions, communications, military sites, and government sectors. According to Igor Stolyarov, Technical Sales & Business Manager at Group IB, these areas were at high risk, highlighting the need for a stronger cybersecurity framework. Additionally, Haytham Nassar, Cybersecurity Specialist at CISCO, revealed that ransomware attackers often exploit dormant accounts to initiate breaches, targeting sectors such as finance, education, and manufacturing.

Notable ransomware and malware groups active in 2023 included prominent names such as White Rabbit, RedLine Stealer, Raccoon, META Stealer, and Lockbit, which intensified attacks on Pakistan. As these cyber threats grow, the AI policy’s implementation could prove pivotal in securing Pakistan’s digital landscape.

Looking Ahead

Pakistan’s AI policy represents a significant step towards digital transformation, providing the foundation for a resilient cybersecurity framework and a thriving digital economy. As the government finalizes this policy and advances its digital infrastructure, Pakistan is set to achieve a safer, digitally empowered environment that supports economic growth and national security.

PSX Maintains Bullish Trend as KSE-100 Crosses 94,000 Points

Khashif Sarfraz
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PSX Maintains Bullish Trend as KSE-100 Crosses 94,000 Points

The Pakistan Stock Exchange (PSX) continued its robust rally on Thursday, with the KSE-100 index surpassing the 94,000-point mark during intraday trading. This surge reflects growing investor confidence, driven by economic stability and positive market sentiment towards blue-chip stocks. The day began with a strong 547-point surge, pushing the index to 93,903 points.

As the trading session continued, the market momentum gained strength, reaching a high of 94,217 points, marking a peak increase of 816 points by noon. The KSE-100 index sustained this upward trend, ultimately recording a significant gain of 799 points to reach 94,154 points by midday.

This rally follows a strong start to the week, as the PSX has been experiencing a bullish trend due to favorable economic conditions and declining interest rates. On Wednesday, the market entered a consolidation phase, closing with a modest 131-point gain, primarily driven by investor interest in second and third-tier stocks.

According to Ahsan Mehanti, Managing Director of Arif Habib Corporation, “Stocks showed resilience due to strong valuations in mid-tier shares and positive data on car sales, which rose 112% year-on-year in October. Additionally, the Federal Board of Revenue’s assurance to the IMF of no mini-budget bolstered investor confidence.”

Mid-Week Market Highlights

On Wednesday, the KSE-100 index fluctuated between a high of 93,804 points and a low of 92,943 points, before closing with a gain of 130.86 points, settling at 93,355.43. Trading volume remained robust, with over 806 million shares traded, totaling Rs31 billion in value. Notably, consistent buying by mutual funds helped support the index’s recent gains, highlighting investors’ confidence in the market’s growth potential.

Key Sector Performances

Topline Securities noted that the market saw strong contributions from the oil, cement, and pharmaceutical sectors, particularly through stocks like Mari Petroleum, Lucky Cement, and The Searle Company. These stocks collectively added 461 points to the index. Conversely, profit-taking was observed in Oil and Gas Development Company, Fauji Fertiliser Company, and Meezan Bank, leading to a combined loss of 213 points.

The KSE-100 index’s bullish performance has been fueled by key catalysts, including a stable rupee, declining bank lending rates, and optimism surrounding economic reforms. Top contributors to the rally included notable names in the oil and gas sector, pharmaceuticals, and cement, indicating sectoral rotation based on attractive valuations and favorable economic conditions.

Economic Factors Influencing the Market

The PSX’s rally can be attributed to a mix of positive economic indicators, such as the upbeat data on car sales, which surged by 112% year-on-year in October, and assurances from the FBR about dropping contingency measures for a mini-budget. This news contributed to the optimism among investors, signaling an environment conducive to market stability and growth.

Additionally, foreign interest in Pakistani stocks has been rekindled following the MSCI’s revision of Pakistan’s standard index weight to 4.4%, boosting the appeal of PSX-listed securities in global markets. However, some foreign selling was observed on Wednesday, with investors offloading a net Rs1.39 billion in shares, according to NCCPL data.

Corporate Developments

In corporate news, Bank Alfalah withdrew its offer for Samba Bank after Saudi National Bank decided not to sell its 84.51% stake. Meanwhile, Rousch Power announced a negotiated settlement to end its power purchase agreement, marking a notable corporate decision as the company seeks new directions.

Among volume leaders, WorldCall Telecom saw trading in 43.3 million shares, closing at Rs1.26. Waves Home Appliances and Pakistan Refinery also posted high trading volumes, gaining 11% and remaining steady, respectively.

Outlook

Analysts remain optimistic about the PSX’s near-term prospects, recommending a “buy-on-dips” strategy, particularly in the oil, pharmaceutical, and fertiliser sectors. JS Global’s Mubashir Anis Naviwala noted, “The KSE-100 index’s recent consolidation has provided a stable base around the 92,000-94,000 range, signaling potential for further gains as investors look towards undervalued sectors.”

Moving forward, the PSX is expected to maintain its positive momentum, supported by continued interest in blue-chip stocks and key economic indicators. As long as global market trends and domestic policies remain favorable, the PSX could continue to see strong growth in the coming weeks.

PSX Hits New All-Time High as KSE-100 Index Climbs to 93,648 Points

Khashif Sarfraz
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0
PSX Hits New All-Time High as KSE-100 Index Climbs to 93,648 Points

The Pakistan Stock Exchange (PSX) rallied to a new all-time high of 93,648 points, propelled by a surge in blue-chip stocks. Investor optimism surged on news of impending privatisation of state-owned enterprises (SOEs) and foreign interest from the MSCI’s recent index weight adjustment for Pakistan.

A stable rupee and declining lending rates, influenced by falling government bond yields, further fueled buying activity.

“Stocks reached a new all-time high, led by blue chips, on the IMF’s calls for privatisation of SOEs and anticipated foreign interest following the MSCI index weight increase to 4.4%,” noted Ahsan Mehanti, Managing Director of Arif Habib Corp.

At the market close, the KSE-100 index was up by 356.64 points, or 0.38%, reaching 93,648.33.

Market Dynamics and Sector Performance

Topline Securities reported a positive momentum with the KSE-100 index peaking at 94,020 points and reaching a low of 93,319 during the day, as investors were drawn to lower valuations in the pharmaceutical sector.

Key contributors to the index included Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), Abbott Laboratories, The Searle Company, and GlaxoSmithKline, collectively adding 399 points. Trading remained strong with 815 million shares worth Rs37 billion exchanged.

According to AHL, exploration and production (E&P) stocks and Sui companies performed strongly, with the KSE-100 index rising 0.4% day-on-day. Pharmaceutical stocks also saw gains, with several reaching their daily price limits.

Noteworthy movements included Sui Southern Gas Company (+10%) and Pak Elektron (+8%), with Pak Elektron hitting a record trading volume of 78 million shares. Attock Refinery, down 4.04%, clarified that recent sale rumors were unfounded, briefly affecting its share price.

Investor Sentiment and Key Takeaways

JS Global analyst Mubashir Anis Naviwala observed high volatility, as the PSX hit an intra-day peak of 94,020 before profit-taking pulled it down to 93,319. Despite fluctuations, strong interest in E&P and pharma stocks sustained positive investor sentiment, closing the day with a 357-point gain at 93,648.

“Looking ahead, we recommend a buy-on-dips approach with a focus on E&P, pharmaceutical, and fertiliser sectors, which hold potential upside,” noted Naviwala.

Trading volumes rose to 815.2 million shares, up from Friday’s 763.3 million, with a total value of Rs37.3 billion. Shares of 454 companies traded, with 227 gaining, 184 losing, and 43 remaining unchanged.

Cnergyico PK led in volume with 98.6 million shares traded, gaining Rs0.4 to close at Rs4.52. Pak Elektron followed with 78.1 million shares, up Rs2.15 to close at Rs29.01, and K-Electric had 70.2 million shares, rising Rs0.14 to close at Rs4.98.

PSX Hits New Record as KSE-100 Index Surges Over 94k Points

Khashif Sarfraz
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0
PSX Hits New Record as KSE-100 Index Surges Over 94k Points

Pakistan Stock Exchange (PSX) Hits New Record as KSE-100 Index Surges Over 94,000 Points

The Pakistan Stock Exchange (PSX) witnessed a strong start to the week as the KSE-100 Index hit a new record on Monday. During intra-day trading, the index surged by 526 points or 0.59%, briefly crossing the 94,000-point threshold at 11 am.

The market closed at 93,648.32 points, with a 356.64-point increase, marking a 0.38% rise after reaching a high of 94,020.02 points during the session. This milestone followed a robust rally the previous week, where bulls led the market to a 2,400-point gain driven by the State Bank of Pakistan’s (SBP) policy rate cut by 2.5 percentage points.

The rate cut signaled improved liquidity and economic stability, positively impacting investor sentiment. The government’s recent Sukuk auction also raised a substantial sum, with yields across all tenors contracting, reflecting strong investor demand for government-backed securities.

Economic Indicators and Market Dynamics

Workers’ remittances grew to $3.1 billion, while SBP’s foreign exchange reserves saw a modest rise of $18 million, reaching $11.17 billion. On Friday, stocks broke past the 93,000-point mark, boosted by favorable global equities and lower local lending rates.

For the week, the KSE-100 index closed at 93,292 points, reflecting a week-on-week (WoW) increase of 2.7%. Trading volume rose by 31% to an average of 735 million shares. Muhammad Waqas Ghani, Deputy Head of Research at JS Global, noted the bullish market momentum, driven by SBP’s ongoing monetary easing cycle.

The SBP’s decision to reduce the policy rate by another 250 basis points to 15% was largely due to a declining inflation trend, marking the fourth rate cut in the cycle. This brings the cumulative rate reduction to 700 basis points from the peak of 22%.

Positive Developments and Foreign Investments

The market received further momentum when eight Pakistani companies were added to the MSCI Frontier Markets Small Cap Index, expected to draw in global investors and increase foreign fund inflows. According to Federal Board of Revenue (FBR) data, income tax collection faced a shortfall in the first four months of FY25.

On the international front, the government is set to finalize its strategy for talks with the International Monetary Fund (IMF) staff mission scheduled for November 11-15. Meanwhile, Prime Minister Shehbaz Sharif sent a special delegation to Saudi Arabia to finalize agreements worth $2.8 billion between the two countries.

In October 2024, remittances hit $3.05 billion, marking a 24% increase compared to the same month last year, noted the JS deputy head of research.

AHL Research’s Market Review and Sector Performance

AHL Research reported that the market’s impressive performance took the KSE-100 index to an all-time high of 93,292 points, bolstered by SBP’s historic 250-basis-point policy rate cut. Pakistan’s weight in the MSCI Frontier Markets Index also rose to 4.4%, positioning it as the second most liquid market.

The government raised Rs339 billion through Ijarah Sukuk, with yields decreasing by 43 to 104 basis points. Additionally, the Pakistani rupee remained stable against the US dollar, closing at Rs277.95.

Sector-wise Performance

Key sectors contributing to the index rise included:

  • Fertiliser: +505 points
  • Cement: +404 points
  • Power Generation and Distribution: +376 points
  • Oil and Gas Exploration: +320 points
  • Automobile Assemblers: +288 points

Despite a positive week, foreign selling reached $4.65 million, contrasting with the previous week’s net buying of $1.97 million.

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