On Wednesday, bullish momentum propelled the Pakistan Stock Exchange (PSX) upward, with the benchmark KSE-100 Index surging beyond 63,000 points.
This climb was fueled by economic revitalization efforts, positive indicators, heightened investor confidence, and anticipated inflows, including the second tranche from the International Monetary Fund (IMF). By 10:00 am, the benchmark index had gained 536 points or 0.79%, reaching a record high of 63,492.90 in the early trading hours.
The market sentiment received a boost from a recent staff-level agreement between Pakistan and the IMF during the first review of the $3 billion Stand-By Arrangement (SBA). This agreement paved the way for releasing a $700 million second tranche to Pakistan in mid-December.
The Ministry of Finance’s latest report, titled “Monthly Economic Update and Outlook for November,” highlighted a bullish wave at the PSX due to a favorable IMF review and a consistent monetary policy stance. The report emphasized that Pakistan’s economy is on a gradual but promising path to recovery, with increasing economic activity attributed to the pace of revitalization initiatives.
Investors found encouragement in improved financial indicators, such as Saudi Arabia’s extension of a $3 billion deposit, an anticipated $2 billion inflow from the World Bank in FY24, above-target tax collection by the Federal Board of Revenue (FBR), and a relatively stable rupee. Market experts anticipate a decline in interest rates from 2024, attracting more flows to the equity market, and they expect corporate earnings to improve in the coming quarters, reflecting economic recovery.
The PSX witnessed a remarkable 17% rise and the highest foreign investment in six years, reaching $34.5 million in November 2023, signaling strong investor confidence in the country’s economic revival.
This marked the second-highest monthly return in percentage terms in over a decade, surpassed only by the abnormal return during the COVID-19 period in April 2020.
The surge in Pakistan’s stock market rally has played a pivotal role in the benchmark index’s 50% increase since late June, making it the world’s second-best performer during this period, following Argentina.
