KARACHI: Pakistan stocks rallied on Thursday following the announcement of a loan agreement worth approximately $2.3 billion between Pakistan and a consortium of Chinese banks.
This positive development led to significant gains in the Pakistan stocks, with the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closing at 42,717 points, up 259 points from the previous day’s close of 42,458 points.
Analysts at Arif Habib Limited reported that the Pakistan stocks was dominated by bullish sentiment throughout the day. The broad-based rally was fueled by the signing of the RMB 15 billion ($2.3 billion) loan facility agreement with the Chinese banking consortium, which also bolstered the recovery of the Pakistani Rupee (PKR) against the US Dollar. Trading volumes remained robust across the board, reflecting investor optimism.
The Independent Power Producers (IPP) sector was particularly in the limelight after the Economic Coordination Committee (ECC) of the Cabinet approved a substantial Rs149 billion allocation for the power sector. This amount is earmarked to be paid to the IPPs and K-Electric within the current fiscal year, adding further positive momentum to the Pakistan stocks.
However, some profit-taking was observed in the final trading hour, tempering the day’s gains slightly. The KSE-100 index ultimately closed at 42,716.97 points, marking an increase of 258.83 points, or 0.61% on a day-over-day basis. Key sectors contributing to the index’s performance included Power (+74.8 points), Banks (+52.2 points), Technology (+26.4 points), Oil Marketing Companies (OMCs) (+25.9 points), and Cement (+15.0 points).
Trading volumes at Pakistan stocks saw a significant uptick, rising from 266.1 million shares to 349.5 million shares, a 31.3% increase on a day-over-day basis. The average traded value also climbed by 19.7%, reaching USD 48.9 million compared to USD 40.9 million the previous day.
Among individual stocks, notable contributors to the trading volumes included Cnergyico Pk Limited (CNERGY), Pakistan Refinery Limited (PRL), K-Electric Limited (KEL), Unity Foods Limited (UNITY), and TPL Properties Limited (TPLP).
The loan agreement with the Chinese consortium is expected to provide much-needed financial support to Pakistan’s economy, which has been grappling with currency depreciation and inflationary pressures. This influx of capital is anticipated to stabilize the PKR and boost investor confidence in the market.
Looking ahead, analysts suggest that the Pakistan stocks could continue to see positive momentum if the government implements further economic reforms and attracts additional foreign investment. For now, the successful loan agreement with Chinese banks has provided a welcome boost to Pakistan’s stock market, reflecting renewed optimism among investors.
