Karachi, May 17, 2024 – The benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) continued its remarkable ascent on Friday, closing at a record high of 75,342 points.
This represents a gain of 422 points, or 0.55%, from the previous day’s close of 74,930 points.
Analysts at Topline Securities noted that the KSE-100 Index largely traded in positive territory throughout the session, driven by a variety of favorable factors. One of the primary catalysts for this upward momentum was a decline in yields on Treasury Bills (T-Bills) following an auction on Wednesday, where yields decreased across all tenors. This drop in yields has made equity investments more attractive relative to fixed-income securities, prompting increased buying interest in the stock market.
Major positive contributions to the index came from several key companies, including Dawood Hercules Corporation (DAWH), Hub Power Company (HUBC), Thal Limited (THALL), Engro Fertilizers (EFERT), and Fauji Fertilizer Company (FFC), which collectively added 222 points to the index.
The trading session saw a robust traded volume and value, standing at 495 million shares and Rs. 17.6 billion respectively. K-Electric Limited (KOSM) emerged as the volume leader for the day, with 44 million shares changing hands.
This week’s performance has been particularly noteworthy, with the KSE-100 Index rising by 3.09% on a week-over-week (WoW) basis. Analysts attribute this positivity to several significant developments, including the arrival of an International Monetary Fund (IMF) team in Pakistan. The government is in the process of negotiating its 24th IMF program, aiming for a three to four-year package valued between $6 billion and $8 billion. The prospect of securing this financial support has boosted investor confidence, leading to increased market activity.
Additionally, foreign corporate buying has provided a significant stimulus to the market, with net purchases amounting to $15.18 million as of Thursday’s close. This influx of foreign capital underscores the attractiveness of the Pakistani market to international investors.
Other notable developments during the week include the T-Bill auction on Wednesday, where yields declined by 6-49 basis points, reflecting improved investor sentiment. The current account recorded a surplus of $491 million in April 2024, up from a surplus of $434 million in March 2024, bringing the 10-month fiscal year-to-date current account deficit to $202 million. Furthermore, foreign direct investment (FDI) for April 2024 surged to $359 million, marking a 39% month-over-month increase and a 172% year-over-year increase.
The average daily traded volume and value for the outgoing week stood at 555 million shares and Rs. 21.9 billion respectively, highlighting the high level of market activity and investor engagement.
Market participants are optimistic that the current positive momentum will continue, driven by favorable macroeconomic indicators and ongoing negotiations with the IMF. As Pakistan navigates its economic challenges, the stock market’s resilience and growth reflect a broader confidence in the country’s economic prospects.
In conclusion, the KSE-100 Index’s new high of 75,343 points is a testament to the strong investor sentiment and positive economic developments. With continued support from both domestic and international investors, the outlook for the PSX remains bright, positioning it for further gains in the near future.