Pakistan’s stock market is on the verge of a historic achievement, with the KSE-100 Index closing in on the 100,000 mark. Investors are pouring into equities as positive macroeconomic trends, falling bond yields, and monetary easing foster a bullish sentiment.
On Thursday, the KSE-100 Index rose by 1,781.94 points (1.86%), closing at a record 97,328.39. This year, the index has climbed an astounding 55.85%, or 34,877 points, reflecting the renewed investor confidence in Pakistan’s economic trajectory.
Market Snapshot: Key Figures and Insights
- Intraday High and Low: The index experienced a trading range of 2,136.94 points, reaching an intraday high of 97,437.15 and a low of 95,300.21.
- Volume and Participation: A total of 323.53 million shares were traded on the index. Across 100 companies, 61 closed higher, 37 lower, and 2 remained unchanged.
Sectoral and Stock Performance
Leading Sectors
The rally was led primarily by the fertilizer sector, contributing over 1,155 points to the index. Other significant contributors included:
- Oil & Gas Exploration: +135.07 points
- Pharmaceuticals: +123.59 points
- Commercial Banks: +88.97 points
Conversely, the Technology & Communication sector dragged the index down by 38.48 points, followed by Insurance(-9.18 points) and Chemicals (-6.31 points).
Top Gainers
- FFBL, GLAXO, FFC: All gained +10.00%.
- PSEL: +9.99%
- FATIMA: +8.87%
Top Losers
- MEHT: -6.85%
- KOSM: -6.46%
- EFUG: -3.56%
Broader Market Trends
The All-Share Index gained 950.46 points (+1.55%), closing at 62,132.63. A total of 969.91 million shares were traded across 455 companies, with 249 advancing, 165 declining, and 41 unchanged.
Macroeconomic Factors Driving the Rally
1. Easing Inflation
Pakistan has made remarkable progress in controlling inflation, which stood at:
- 7.2% in October: Down significantly from a record 38% in May 2023.
- November Forecast: Expected to decline further to 4.6%, the lowest since April 2018.
Lower food and transport costs, alongside government subsidies, have played a pivotal role in reducing inflationary pressures.
2. Stabilizing Currency
The Pakistani rupee has stabilized, trading at PKR 278.04 per USD in the interbank market. This stability, coupled with improving external accounts, has boosted investor confidence.
3. Current Account Surplus
For the third consecutive month, Pakistan recorded a current account surplus:
- October 2024: Surplus of $349 million.
- 4MFY25: Total surplus of $218 million, compared to a deficit of $1.53 billion last year.
Key contributors include:
- Exports: Up 11.5% YoY in October to $3.71 billion.
- Remittances: Rose 23.9% YoY, totaling $11.85 billion in 4MFY25.
4. Monetary Easing
The State Bank of Pakistan (SBP) has cut interest rates by 700 basis points, bringing the benchmark rate down to 15%. Lower bond yields have redirected liquidity into equities, with mutual funds investing over $129 million into Pakistani stocks since January.
Outlook for the KSE-100 Index
Analysts predict that the KSE-100 Index could rally by another 20% in 2024, driven by:
- Continued monetary easing
- Strengthened fiscal policies
- Persistent foreign and domestic investment
However, challenges remain, including potential geopolitical risks and global economic uncertainties.
Conclusion
The KSE-100 Index’s impressive performance underscores a significant turnaround in Pakistan’s economic landscape. With inflation under control, a stabilizing currency, and a current account surplus, the outlook for equities remains positive. As the index nears the symbolic 100,000 milestone, investor optimism is expected to grow further, positioning Pakistan’s stock market as a beacon of recovery and growth in the region.
PAKISTAN MARKETS
The Pakistani rupee (PKR) continued its recent trend of stabilization, appreciating slightly by 8.33 paisa (0.03%) against the US dollar in Thursday’s interbank trading session. The currency closed at PKR 277.96 per USD, improving from the previous day’s value of 278.04.
The prices of gold and silver saw a significant uptick on Thursday, fueled by escalating geopolitical tensions and a flight to safe-haven assets. With the Russia-Ukraine war intensifying, investors shifted their focus to precious metals, traditionally considered a hedge against uncertainty and inflation.
In the domestic market, 24-karat gold surged by Rs3,700, reaching Rs278,000 per tola. Similarly, the price for 10 grams of 24-karat gold rose by Rs3,172, hitting Rs238,340, according to the All-Pakistan Gems and Jewelers Sarafa Association (APGJSA).
Globally, spot gold prices climbed to $2,668 per ounce, reflecting an increase of $15.8 (0.60%) from the previous session. This marks a fresh one-and-a-half-week high for the metal, driven by intensified demand due to geopolitical risks.
