KARACHI: The Pakistan Stock Exchange (PSX) on Friday surged past 46,000 level after a gap of 15 months, making analysts attribute the bullish trend to the buying activity of foreign investors and improved corporate financial results.
The benchmark KSE100 index rose to 46,122 points for the first time after April 2022 during the trading session, though it closed at 45,920 by gaining 522 points.
“Since the start of July 2023, the foreign corporate investors have bought equities worth $14.2 million as compared to the combine outflow of $67 million during the last fiscal year,” Shahid Ali Habib, CEO of Arif Habib Limited, told Arab News. “The market was also supported by blue-chip companies, including State Life Insurance among others, since they were upbeat.”
The price return of KSE100 index companies surged by more than 11 percent during the ongoing month after the government succeeded in securing a $3 billion bailout program from the International Monetary Fund (IMF).
“The agreement with the IMF has cleared uncertainty related to the program future while the fears of default have also subsided,” Ali Nawaz, CEO of Chase Securities, said.
“The signing of SBA [standby arrangement with the international lender] has boosted investor confidence which, coupled with better corporate results, played a key role in creating bullish sentiments at the bourse,” he continued.
Pakistani financial experts said they were optimistic market sentiments would continue to prevail in the foreseeable future.
“We expect that with the uncertainty related to political situation and SBA signing, the index will gradually scale up and add 4,000 points more,” Habib said.
Nawaz also maintained the “index would breach 50,000 level by the end of the current year.”
Despite the positive mood at the PSX, the Pakistani rupee continued to remain under pressure in the currency market despite the country’s rising foreign exchange reserves. During the week, the rupee lost its value by 2.6 percent against the greenback and closed at Rs286.81 in the interbank market on Friday.
The central bank on Thursday said Pakistan’s official forex reserves had increased by $4.2 billion to $8.7 billion after Saudi Arabia deposited $2 billion, United Arab Emirates transferred $1 billion, and the IMF disbursed $1.2 billion.
The currency dealers said the demand for US dollar was on the rise since businesses had to make import payments.
“The demand for dollar has come from the importers after the government relaxed some restrictions and allowed them to clear containers stuck at the ports,” Zafar Sultan Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), told Arab News.
However, he informed the dollar appreciation was timebound and would stabilize after containers were cleared.
