Islamabad, Dec 21: After a two-day record-breaking selloff, buying activity returned to the Pakistan Stock Exchange (PSX) on Friday, with the benchmark KSE-100 index surging by over 3,200 points.
The KSE-100 index climbed 3,238 points to close at 109,513, reflecting a 2.96% increase from the previous session’s close.
This rebound followed a steep loss of over 8,500 points during Wednesday and Thursday’s massive selloff. On Wednesday, the index fell by 3,790 points (3.41%), marking its worst-ever single-day decline in terms of points. The selloff continued on Thursday, with a further decline of 4,795 points (4.51%).
Trading volume reached 740.04 million shares, a decline from 1.15 billion shares traded the previous day. The value of traded shares dropped to Rs. 38.89 billion from Rs. 52.14 billion. Out of 459 companies trading, 281 recorded gains, 119 posted losses, and 59 remained unchanged.
A report by Topline Securities noted that since September 2024, the PSX has delivered a 35% return in both rupee and US dollar terms. This performance was driven by strong net inflows of Rs. 58 billion ($207 million) into local mutual funds, largely due to a shift from fixed income to equities.
The report attributed this shift to falling yields on fixed income instruments. Yields on 12-month and 6-month Treasury Bills have dropped from peaks of 24.73% and 24.51% in September 2023 to 12.20% and 11.9% as of December 19, 2024, a decrease of 1,253-1,261 basis points.
Topline Securities projected that equities will remain a preferred investment choice. It cited several factors for this trend: stricter restrictions on dollar purchases, higher taxes and compliance requirements on real estate, and the discontinuation of high-denomination unregistered prize bonds, which have redirected liquidity towards equities.
