KARACHI: The Pakistan Stock Exchange crossed the 154,000 mark on Friday, with analysts citing trade deals from Prime Minister Shehbaz Sharif’s China visit and expectations of higher cement sales from post-flood reconstruction as reasons behind the bullish trend.
The KSE-100 index rose by 1,611.47 points, or 1.06 percent, to close at 154,277.19, compared to the previous close of 152,665.72.
Jibran Sarfaraz, a stocks dealer at Munir Khanani Securities, said Pakistan’s opportunity to boost exports through lower tariffs compared to neighboring countries has contributed to the market’s upward trajectory.
“Then came the floods, which, being a natural disaster, caused significant losses especially as crops were destroyed,” he told Arab News.
“At the same time, the positive side is that reconstruction will create higher demand for steel and cement, boosting their sales,” he continued.
“The Pakistani PM’s visit to China has raised expectations of further trade between both the countries, and on the international stage, Pakistan’s profile has been elevated.”
Sarfaraz added that resolving tariff issues with the US and easing tensions with India have also helped the market gain momentum in recent weeks.
“After that, we saw the market continue to grow, with strong performances from the banking, steel, pharma and textile sectors,” he added.
Meanwhile, Ahsan Mehanti, CEO of Arif Habib Commodities, attributed the market’s performance to the government’s approval for resuming subsidies on fully funded remittances to support rupee stability.
These subsidies refer to reimbursements to banks and exchange companies on eligible inward remittances, making it possible for them to offer nominal or no fees to senders while covering their own costs.
He also mentioned another factor for the market surge, involving the energy regulator, NEPRA, possible cuts to industrial electricity tariffs that can bring down production costs.
“Nepra hints over negative industrial tariff adjustments, speculations over government resolve to settle power sector circular debt crises played catalyst role in bullish close at PSX,” he said.
Pakistan and China signed 21 memorandums of understanding and joint ventures worth $4.2 billion to boost business cooperation in various sectors during Sharif’s visit this week.
At the same time, floods have devastated Punjab, Pakistan’s most populous province, killing 49 people so far and destroying large areas of cropland.
