Market Surge Fueled by IMF Stand By Agreement and Positive Investor Sentiment
Karachi, July 3, 2023: In a historic day for country’s stock market, Pakistan stocks experienced their highest ever gain on Monday, marking an exceptional bullish trend.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) concluded at an impressive 43,899 points, surging by 2,446 points or 5.9% from its last closing of 41,453 points on June 27, 2023.
Analysts at Topline Securities declared it as “The Most Bullish Day” in the history of Pakistan equities, emphasizing the significant positive closing and the remarkable gain in points. The 2,446-point increase recorded by the KSE-100 index on Monday stands as the highest ever gain since its inception in November 1991. The market closed at a level last seen in May 2022, almost 14 months ago.
Shortly after the opening bell in the morning, the market witnessed a momentary halt of seven minutes as the free float index surged 5% and remained stable for five minutes, triggering a temporary halt in trading. This halt was the quickest “Bull Run Market Halt” experienced at 9:37 am, signaling the market’s bullish aggressiveness and further price appreciation in the days ahead at the PSX. The previous “Bull Run Market Halt” occurred on April 17, 2020, at 10:52 am.
More than 40% of the index constituents hit their upper circuit limit for the day, indicating strong buying sentiment, with no sellers even at the upper circuit level.
The unprecedented bullish trend is primarily attributed to the Stand By Agreement (SBA) between Pakistan and the International Monetary Fund (IMF). Under this agreement, Pakistan is set to receive $3 billion in an extended arrangement of nine months, following the expiry of the IMF EFF program on June 30, 2023. This development not only alleviates concerns of a potential default but also fulfills the prerequisite conditions for unlocking various bilateral and multilateral funding opportunities.
Buying sentiment was observed across multiple sectors, with particular strength in the technology, power, fertilizer, banking, and cement sectors. Stocks such as SYS, HUBC, ENGRO, UBL, and LUCK played a significant role in driving the market’s positive performance, collectively contributing 671 points.
The overall market witnessed increased volumes and value, with trading volumes reaching 381 million shares, up 62% compared to the previous day, and the total value of trades amounting to Rs. 8.6 billion, up 16% compared to the previous day. WTL emerged as the most traded stock, with a trading volume of 54.9 million shares.
As Pakistan’s stock market experiences this historic surge, investors are buoyed by the positive sentiment and anticipate further growth in the coming days, fueled by the IMF Stand By Agreement and increased investor confidence.
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