PAKISTAN ECONOMY: The Pakistan Stock Exchange continued its bullish streak on Friday, with the benchmark KSE-100 index surging by 498.61 points or 0.65%, reaching an all-time high of 76,706.7. This follows a significant rise of 3,411 points or 4.7% on the previous day, marking the largest jump since the IMF bailout package last year.

The market’s positivity was bolstered by the government’s decision to maintain the capital gains tax rate. Foreign investors have shown increased confidence, injecting $148.6 million into Treasury Bills (T-Bills) in the first 25 days of May, the highest inflow since 2020. This fiscal year to date has seen a net flow of $300.5 million in T-Bills through Special Convertible Rupee Accounts (SCRA), as per the State Bank of Pakistan (SBP).

This surge in investment reflects growing confidence in Pakistan’s improved economic conditions and a stable exchange rate. Additionally, foreign investors capitalized on higher interest rates ahead of the SBP’s recent policy rate cut by 150 basis points to 20.5% on June 10, 2024. T-Bills previously offered attractive returns of 21% for three and six-month papers, and 20.1% for 12-month papers, payable in Pakistani rupees.

PAKISTAN ECONOMY: The revised trade deficit for May 2024 was $2.108 billion, a slight increase of 0.05% year-on-year (YoY), but a significant decrease of 15.51% from April 2024’s deficit of $2.495 billion. Exports rose by 29.27% YoY to $2.84 billion, while imports increased by 14.96% YoY to $4.95 billion. In Pakistani rupee terms, exports amounted to Rs790 billion, showing a 20.83% month-on-month (MoM) increase and a 25.99% rise YoY.

Main export commodities included Knitwear (Rs115 billion), Readymade garments (Rs97.56 billion), and Bed wear (Rs77.18 billion). Imports included Petroleum products (Rs188.21 billion), Petroleum crude (Rs139.1 billion), and Electric machinery & apparatus (Rs102.63 billion).

PAKISTAN ECONOMY: The gold price in Pakistan rose to Rs241,500 per tola, up Rs800, reflecting reduced purchasing power. The Pakistani rupee appreciated slightly by 8.22 paisa against the US dollar, closing at PKR 278.51 per USD in the interbank market.

The SBP injected a total of Rs11.96 trillion into the market through reverse repo and Shariah Compliant Modarabah-based Open Market Operations (OMO), with Rs11.72 trillion through reverse repo OMO.

PAKISTAN ECONOMY: The Securities and Exchange Commission of Pakistan (SECP) launched a regularization scheme for companies with defaults on annual filings, running from June 15 to September 15, 2024. The scheme allows companies to file overdue returns without penalties.

PAKISTAN ECONOMY: In corporate news, Pakistan Credit Rating Agency Limited (PACRA) maintained Ghani Chemical Industries Limited’s (GCIL) ratings at “A” for long-term and “A1” for short-term with a stable outlook. GCIL, involved in manufacturing and trading medical and industrial gases, reported a 12.2% revenue growth in 9MFY24. The company is expanding its capacity with a new Air Separation Unit in the Hattar Economic Zone, set to be operational in July 2024.

PAKISTAN ECONOMY: The State Bank of Pakistan’s weekly report on SCRA showed a net purchase of Rs21.67 billion for the week ended June 07, 2024. Gross sales of securities were Rs19.46 billion, 47.68% lower than the previous week, while total purchases were Rs41.13 billion, resulting in a net purchase of Rs21.67 billion.

PAKISTAN ECONOMY: The Competition Commission of Pakistan (CCP) granted exemptions on specific clauses of agreements between Emirates Telecom, Careem Networks, and Uber until December 2025. This aims to foster technical progress and enhanced services for consumers.

PAKISTAN ECONOMY: Global rating agency Moody’s on Friday highlighted significant concerns regarding Pakistan’s debt sustainability. The agency noted that the government allocates more than half of its revenue to interest payments, reflecting very weak debt affordability.

In its assessment of the newly proposed finance bill for fiscal year (FY) 2025, Moody’s stated, “The budget estimated debt servicing payments to have increased by about 18% for fiscal 2025 compared with a year ago.”



Experienced Senior Research Analyst



Sikander Raza, a Senior Technical Analyst



Hamza Saleem, a Senior Business Analyst



Irsa Sajjad, as a Research Analyst for Equities

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