ISLAMABAD: Pakistani stocks continued their record-breaking streak on Thursday, crossing the 114,000-point mark for the first time at the trading session’s end, as euphoria gripped investors following a significant decline in T-bill auction yields.
The KSE-100 index opened on a strong note, marking an intraday high of 3,598 points before closing at 114,180, gaining 3,370 points or 3.04 percent, by the end of the sessionn.
“The stock market extended its historic rally as euphoria gripped investors following a significant decline in T-bill auction yields, a development that fueled aggressive buying across the board, driving the market to new heights,” Topline Securities said in its end-of-day market review.
“The remarkable performance highlights sustained optimism, with the market now rallying an astounding 185 percent over the past 18 months. Today’s broad-based buying saw blue-chip and growth stocks in key sectors like fertilizer, exploration and production, and technology leading the charge, reflecting robust investor confidence amid a shifting macroeconomic environment.”
Trading activity was vibrant, with a total volume of 1,464 million shares and a turnover of Rs67 billion. WorldCall Telecom (WTL) led the volume charts, with 232 million shares traded during the day, Topline said.
Fauji Fertilizer Company Limited (FFC), Mari Petroleum Company Limited (MARI), Pakistan Petroleum Limited (PPL), Pakistan State Oil Company Limited (PSO), Engro Corporation Limited, and Oil and Gas Development Company (OGDC) collectively added 2,028 points to the benchmark index.
“Lower T-Bill yields, leading up to next week’s monetary policy, are driving investor enthusiasm,” Head of Equities at Intermarket Securities Raza Jafri told Arab News after stocks reached a historic high in intraday trading on Thursday afternoon. “Index heavyweight energy and fertilizer contribute most to today’s rise.”
Arif Habib Corporation Chief Executive Officer Ahsan Mehanti attributed the record-breaking streak to surging global crude oil prices, upbeat Pakistan Oil Fields sales, car sales, cement dispatches data for November 2024 and the Asian Development Bank raising the growth forecast to three percent for FY25.
“These factors played the role of a catalyst in the record surge,” he told Arab News. “Stocks showed record bullish activity after government bonds yields fell by up to 100bps in the State Bank of Pakistan auction expected to bring significant policy easing next week.”
Stocks have been performing well this week on the back of investor confidence of a significant interest rate cut by the central bank at the next monetary policy meeting on Dec. 16.
Pakistan’s central bank has already slashed interest rates by 700 basis points (bps) in four consecutive meetings since June, bringing it to 15 percent.
According to a poll by Topline Securities, 71 percent of participants expect the central bank to announce a minimum rate cut of 200bps next week.
Pakistan’s annual consumer inflation also slowed to 4.9 percent in November, lower than the government’s forecast and the lowest in nearly six years. This is down from 38 percent last year.
Trade data released by the Pakistan Bureau of Statistics also supports positive investor sentiment as the trade deficit narrowed by 7.39 percent during the first five months (July-November) of the current fiscal year, standing at $8.651 billion, compared to $9.341 billion during the same period last year.
Exports rose by 12.57 percent to hit $13.69 billion, while imports increased by 3.90 percent to $22.342 billion during this period. November’s trade deficit narrowed even further, dropping by 18.60 percent year-on-year to $1.589 billion compared to $1.952 billion in November 2023.
