Pakistan’s stock market records highest closing as inflation eases, investment in securities increases

Stockbrokers monitor the latest share prices at the Pakistan Stock Exchange (PSE) in Karachi on July 3, 2023. (AFP/File)
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Updated 03 April 2024
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Pakistan’s stock market records highest closing as inflation eases, investment in securities increases

  • Pakistani investors expect a cut in interest rate in upcoming monetary policy as inflation declines
  • Analysts term foreign inflows in government treasury bills as positive development for stock market

KARACHI: Pakistan’s stock market recorded its highest ever closing at 67,756 points when trading ended on Wednesday, with financial analysts attributing the surge to expectations of a cut in the central bank’s policy rate and an increase in foreign investment in government securities. 

The KSE-100 index on Mar. 28 hit a record high of 67,246.02 points during intraday trade before closing at 67,142.12. Analysts had attributed the surge last week to investors’ expectations of Pakistan reaching another long-term agreement with the International Monetary Fund (IMF). 

As Pakistan’s economic indicators register a slight improvement, stock buyers now expect cuts in the interest rate in the next monetary policy, fueling positive sentiments at the bourse.

“Stocks closed at an all-time high on speculations over the State Bank of Pakistan’s policy easing after the CPI inflation fell to 20.7 percent in March 2024,” Ahsan Mehanti, chief executive officer of Arif Habib Corporation, one of Pakistan’s leading business groups, told Arab News.

 Mehanti pointed out that cement sales surging by 3.85 percent on an annual basis, petroleum products’ sales rising by 4 percent and textile exports growing by 3 percent, and the surge in global crude oil prices contributed to the bullish close at stock market.

Shaharyar Butt, portfolio manager at securities brokerage firm Darson Securities, said encouraging developments at the economic front had also fueled positive sentiments at the stock market. 

“We saw a very positive day at the stock market which remained bullish throughout the day and closed at historic high level,” Butt told Arab News.

“The market hit an intraday high of 67,873 level with a gain of 986.95 points and managed to close at 67,756.03 level, up by 869 points.”

According to Topline Securities, the cement sector stole the spotlight, spearheading the market’s upward trajectory on Wednesday.

US dollar inflows in Pakistan through Treasury bills (T-bills) hit a 4-year high in March 2024, with the country attracting a net inflow of $82 million last month.

Pakistani analysts say foreign investment in government treasuries is an encouraging development that is fueling positive sentiments at the bourse.

“The major development after a long time is that the investors are making investment in the Pakistani rupee through Treasury Bills,” Butt said. “It is stirring positive sentiments at the stock market which was also reflected in today’s trading.”


’I will go’: Bengalis in Pakistan hope for family reunions

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’I will go’: Bengalis in Pakistan hope for family reunions

  • Direct flights between Pakistan and Bangladesh, one nation until 1971m finally resumed last month after 14-year pause
  • Over a million Bengalis now live in Pakistan, many of whom arrived during 1971 war when Bangladesh seceded

KARACHI: Shah Alam traveled from his home in Bangladesh to Pakistan for a brief visit nearly three decades ago, but flaring hostility between the two countries and financial woes left him stranded in the megacity of Karachi.

Now the 60-year-old, who makes a modest living selling dried seafood, is determined to return to his birthplace, having already missed the deaths of his parents and first wife in Bangladesh.

Direct flights between Pakistan and Bangladesh — one nation until 1971 — finally resumed last month after a 14-year pause, reflecting a warming of once-frosty ties since a Bangladeshi student-led uprising ushered in new leadership in 2024.

Shah Alam has already started planning his trip to be reunited with remaining family.

“I will go,” he told AFP with teary eyes.

“I am facing some financial issues but will certainly go with my son after Eid Al-Adha,” referring to the Muslim holiday expected in late May.

Shah Alam, who married again in Pakistan, still owns agricultural land and his family home in Bangladesh.

“Everything is there. I was stuck here,” he told AFP in Karachi, near the well-known Bengali market where he peddles desiccated fish and prawns to make ends meet for $7 to $9 per day.

“I wanted to go back, but there was no way. The relationship (between Pakistan and Bangladesh) was not good. I had no money as well to go back home.”

“Now, I want to see my elder brother and my married daughter who live in Bangladesh.”

BITTER CIVIL WAR

Bangladesh and Pakistan, which are geographically divided by about 1,500 kilometers (930 miles) of Indian territory, split after a bitter war in 1971.

Hundreds of thousands were killed in the conflict — Bangladeshi estimates say millions — and Pakistan’s military was accused of widespread atrocities.

There are estimated to be over a million ethnic Bengalis now living in Pakistan, many of whom arrived during the war, after which East Pakistan declared independence and became Bangladesh.

The vast majority of Bangladesh’s population of 170 million people identify as belonging to the ethnic and linguistic group, and tens of millions more Bengalis live across South Asia, mostly in neighboring India.

Bengalis have long complained that Pakistan, where they are a small minority, has never accepted them as citizens and that they lack access to education, business opportunities and the property market.

Hussain Ahmed, 20, whose family lives in Machhar Colony, one of Karachi’s largest slum areas where most of the population is comprised of Bengalis, does not have Pakistani nationality or an identity card.

“How can I go (to Bangladesh)? I want to go there,” the fish factory worker told AFP. “Even my father doesn’t have an identity card. How can I get it then?“

Karachi has several Bengali neighborhoods, mainly slums, which residents say have housed Bengalis since before East Pakistan became Bangladesh.

Most Bengalis rarely venture outside their home areas owing to fear of being interrogated by law enforcement agencies to prove their “identities” as Pakistani citizens.

“I am a Pakistani, but I don’t have my identity card,” another 22-year-old Bengali, Ahmed, told AFP.

Ahmed says he has the required documents, but cannot prove that his family was living in what is now Pakistan before 1971.

“They declare me a Bangladeshi, but I am a Pakistani,” he said.

Like many others, Ahmed’s relatives live in Bangladesh, but he and his family have never had the chance to see them as they remain stateless.

“We have our relatives there, but the (Pakistan) government doesn’t recognize us.”

’CORDIAL RELATONSHIP’

Last August, Pakistan’s Foreign Minister Ishaq Dar visited Dhaka and met with Bangladesh’s Chief Adviser Muhammad Yunus in the first Pakistani government visit to Dhaka since 2012, with Islamabad calling it a “significant milestone.”

Yunus vowed to warm strained ties with Islamabad after he took the helm of Bangladesh’s government in a temporary capacity following the 2024 overthrow of former Prime Minister Sheikh Hasina who fled to her long-time ally India — Pakistan’s arch-rival.

The diplomatic thaw is widely expected to continue under Bangladesh’s newly elected Prime Minister Tarique Rahman, who took office this month.

Local politician Muhammad Rafiqul Hussain, who was born in Karachi, told AFP that Bengalis like him live across Pakistan and contribute to the economy like other Pakistanis.

He is one of the seven elected leaders from the Bengali community in Karachi’s municipal government.

“This is our fourth generation in Pakistan,” he said, adding there are more than 106 Bengali neighborhoods in Karachi, Pakistan’s largest city which is known as a multicultural melting pot.

For Hussain, the “cordial relationship” between Pakistan and Bangladesh has made a big difference for Pakistani Bengalis.

“Everyone is happy. It will boost both countries’ economies. It will encourage brotherhood like we had in the past.”

However, community activist and lawyer Hafiz Zainulabdin Shah said Bengalis living in Pakistan have lost some of their identity by adopting local languages.

“Bengalis who live in Karachi mostly speak Urdu,” he said, adding: “We don’t have our own culture now.”

But despite Pakistan-based Bengalis living “with a sense of deprivation,” Shah said “they feel content with the newly developed relationship between the two countries.”

“It should continue forever,” he said.