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.