Islamabad, Dec 10: The Pakistan Stock Exchange (PSX) achieved a significant milestone this week as the KSE-100 index soared to an unprecedented 109,054 points, registering a remarkable weekly increase of 7.6% or 7,697 points. This performance established PSX as the top global market for US dollar returns during the week.
Additional optimism stemmed from Pakistan securing $560 million in contracts with Saudi Arabia and raising Rs353 billion through an Ijarah Sukuk auction.
Several sectors led the market surge, notably fertiliser, banking, oil and gas exploration, cement, and power generation. Major contributors included Mari Petroleum, Engro Corp, and UBL.
Indicators of economic activity showed improvement, with cement dispatches rising 6% year-on-year (YoY) to 4.15 million tons and petroleum sales reaching a 25-month peak of 1.58 million tons in November.
Despite foreign investors selling $12.2 million worth of shares, local buyers, particularly mutual funds and banks, drove strong trading activity. Average daily trading volumes reached a record 1.68 billion shares, up 72% week-on-week, while traded value increased 49% to $198 million.
Pakistan Stock Exchange
The rally saw daily progress, starting with a 1,900-point increase on Monday following inflation data. Mid-week, the index surpassed 105,000 points, buoyed by confidence in economic stability and expectations of a policy rate cut by the State Bank of Pakistan (SBP). The momentum peaked with a 3,134-point surge on Thursday and an 800-point rise on Friday, closing above 109,000 points.
Analysts credit the bullish trend to improving macroeconomic conditions, such as rising foreign reserves, falling inflation, and expectations of a 150-200 basis point policy rate reduction in the SBP’s December 16 monetary policy meeting. The anticipated rate cut is expected to enhance liquidity and boost equity markets, with low valuation multiples offering potential for further gains.
Additional highlights included a $620 million increase in SBP reserves, bolstered by a $500 million inflow from the Asian Development Bank (ADB), and a 7.4% YoY narrowing of the trade deficit in the first five months of the fiscal year.
Sector-specific contributions to the index included fertiliser (1,748 points), commercial banks (1,434 points), oil and gas exploration (1,148 points), cement (716 points), and power generation (405 points). Top-performing stocks were Mari Petroleum, Engro Corp, and UBL.
