PSX SUMMARY: The benchmark KSE-100 Index breached the 82,000-point mark for the first time in history on Thursday, driven by optimistic economic data and traders’ heightened expectations for further interest rate cuts by the central bank. This bullish sentiment followed the government’s unexpected rejection of all bids for Market Treasury Bills (MTBs).
The State Bank of Pakistan (SBP) held a Market Treasury Bills (MTBs) auction on Wednesday but rejected all bids despite a target of raising Rs475bn. The total offers amounted to Rs1.43 trillion, with Rs221.54bn in 3-month bids, Rs278.62bn in 6-month bids, and Rs925.13bn in 12-month bids. Bid rates ranged from 16.90%-17.75% for 3 months, 16.60%-18.00% for 6 months, and 15.98%-17.50% for 12 months. If accepted, yields would have dropped by 29-101 basis points across these tenors.
This follows SBP’s recent policy rate cut of 200bps to 17.5%, part of a 450bps reduction since June 2024 to stimulate growth amid easing inflation. In the previous auction on September 4, 2024, the SBP raised Rs835bn against a target of Rs700bn, with cut-off yields at 17.48%, 17.73%, and 16.99% for 3, 6, and 12-month T-bills, respectively.
The index closed the day at 81,459.28, posting a remarkable increase of 997.95 points or 1.24%. During the trading session, the index hit an intraday high of 82,003.58, a rise of 1,542.25 points, before settling lower. The day’s total volume was 184.89 million shares.
IMPROVED CURRENT ACCOUNT BALANCE AND FOREIGN INFLOWS SUPPORT PAKISTAN’S ECONOMY
Pakistan’s current account posted a $75 million surplus after three consecutive monthly deficits, signaling economic recovery. In the first two months of FY24, the deficit narrowed significantly by 80.9%, dropping to $171 millioncompared to $893 million during the same period last year.
Foreign inflows also contributed to market optimism. The country attracted $214 million in Foreign Direct Investment (FDI) in August, reflecting a 50.7% increase year-on-year, and received $165 million via Roshan Digital Accounts (RDA).
FALLING INFLATION BOOSTS CONFIDENCE
Pakistan’s inflation rate fell to single digits in August for the first time in almost three years. With consumer prices expected to slow further in September.
Moreover, attention is focused on the International Monetary Fund (IMF), which is set to review Pakistan’s Extended Fund Facility (EFF) of about $7 billion on September 25, a decision expected to further shape the economic landscape.
TOP MOVERS IN THE KSE-100 INDEX
Of the 100 companies listed on the index, 54 closed higher, while 38 declined and 7 remained unchanged.
Top gainers included:
- LCI (+5.98%)
- SHFA (+5.94%)
- EFERT (+5.40%)
- APL (+5.34%)
- FFC (+5.17%)
Top losers included:
- TRG (-7.68%)
- YOUW (-4.69%)
- PGLC (-3.85%)
- PIBTL (-3.70%)
- PTC (-3.22%)
SECTOR-WISE PERFORMANCE
Key sectors supporting the index were:
- Fertilizer (+460.99pts)
- Commercial Banks (+375.31pts)
- Oil & Gas Exploration Companies (+86.04pts)
- Cement (+73.83pts)
- Oil & Gas Marketing Companies (+33.85pts)
On the other hand, sectors that dragged the index lower were:
- Technology & Communication (-58.33pts)
- Leather & Tanneries (-15.97pts)
- Refinery (-10.39pts)
- Transport (-5.72pts)
- Power Generation & Distribution (-3.65pts)
BROADER MARKET PERFORMANCE
The All-Share Index also saw gains, closing at 52,009.78 with a net increase of 334.77 points or 0.65%.
Total market volume reached 459.04 million shares, a notable increase from the previous session, with a total traded value of Rs18.61 billion.
PAKISTAN MARKETS SUMMARY
On Thursday, the Pakistani rupee (PKR) gained 12.91 paisa, or 0.05%, closing at PKR 277.91 against the US dollar in the interbank market, compared to 278.04 previously. PKR showed slight fluctuations during the day, with a high bid of 278.10 and a low ask of 277.90. In the open market, the dollar was quoted at 279.48 for buying and 280.70 for selling.
Against other major currencies, PKR saw mixed performance, weakening against the Euro and British Pound but strengthening against the Japanese Yen, Swiss Franc, and Chinese Yuan. It remained stable against Gulf currencies, with minor changes in the Saudi Riyal and UAE Dirham.
In the financial year so far, the rupee has appreciated by 0.15% against the dollar, with a calendar year gain of 1.42%. Meanwhile, the 6-month Karachi Interbank Offer Rates (KIBOR) dropped 57 basis points, reflecting a cooling money market.
Gold prices in Pakistan rose by Rs.800 per tola, reaching Rs.268,500, while international gold prices hit $2,577 after the U.S. Federal Reserve cut interest rates by 50 basis points to a range of 4.75%-5.25%. Gold briefly peaked at $2,600 before pulling back. Despite concerns over the U.S. labor market, the overall economic outlook remained stable, contributing to gold’s haven status.
