Pakistan’s key stock index breaks 70,000 barrier, hits new high on Saudi investment optimism

KARACHI: The Pakistan Stock Exchange (PSX) on Tuesday reached another all-time high of 70,314 points, with equity analysts attributing the surge to Prime Minister Shehbaz Sharif’s recent visit to Saudi Arabia and the renewed investment optimism from the kingdom.
The benchmark KSE100 index broke the 70,000-point psychological barrier, gaining 694 points due to the market’s positive momentum following the successful final review of the $3 billion International Monetary Fund (IMF) bailout program.
Over the past nine months, the index has surged by an astounding 70 percent (equivalent to a 75 percent increase in US dollar terms), marking a historic rally not seen in the PSX for two decades, as reported by Topline Securities.
Analysts, however, specifically credit the recent market upturn to the prime minister’s visit to Saudi Arabia, where he and Crown Prince Mohammed bin Salman reaffirmed their commitment to expedite a previously discussed $5 billion investment package between the two countries.
“The key contributing factor to the current rally is the Saudi investment and deposit news along with hope that the IMF will provide long-term funding,” Muhammad Sohail, CEO of Topline Securities, told Arab News.
The $5 billion Saudi investment package includes increasing Saudi deposits in Pakistan’s central bank from $3 billion to $5 billion and injecting investment in oil refinery and mining sector, Reko Dig, according to the Topline research.
Although there has been no official confirmation of it, Pakistani media reports have suggested the kingdom is interested in investing about $1 billion in the Reko Diq gold and copper mine located in Pakistan’s southwestern Balochistan province.
One of the largest undeveloped copper-gold projects in the world, Reko Diq is owned 50 percent by Canada-based Barrick Gold Corporation, 25 percent by three federal state-owned enterprises, 15 percent by Balochistan on a fully funded basis and 10 percent by Balochistan on a free carried basis, according to Barrick.
Ahsan Mehanti, CEO of Arif Habib Corporation, said the stock surged to fresh record highs amid upbeat data on $3 billion remittances surging by 16.4 percent in March 2024 and affirmation on $5 billion investment package from Saudi Arabia for economic support.
“Speculations ahead of the new IMF loan program talks due next week and easing monetary policy rates by the central bank amid falling inflation also played catalyst role in the record close,” Mehanti commented.