KARACHI: The Pakistan Stock Exchange (PSX) closed on a bullish note, with the KSE-100 index rising by 315.44 points to settle at 79,333.05 on Friday, marking a 0.4% increase.
The Pakistan Stock Exchange (PSX) reached a high of 80,016.73 and saw a total trading volume of 916 million shares, valued at over PKR 21.2 billion, across 292,582 trades.
This upward momentum was primarily driven by the State Bank of Pakistan’s (SBP) decision to slash the key policy rate by 200 basis points to 17.5%, spurred by a greater-than-expected decline in inflation. The easing inflation was attributed to delays in energy price hikes and falling global food and oil prices, which created a positive sentiment among investors.
Further boosting market confidence was the anticipation of the International Monetary Fund (IMF) executive board’s likely approval of Pakistan’s Extended Fund Facility (EFF) of $7 billion, scheduled for September 25, 2024. This development is expected to ease concerns regarding the country’s external account, especially in light of the $26 billion in external debt repayments for fiscal year 2025, of which $12 billion are bilateral rollovers.
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Market expert Ahsan Mehanti of Arif Habib Commodities highlighted that the strong performance of the rupee, coupled with rising foreign exchange reserves, also contributed to the bullish close of the Pakistan Stock Exchange (PSX). “The government’s assurance on securing $2 billion in external financing from friendly countries, along with the IMF loan prospects, has significantly lifted investor sentiment,” Mehanti said.
According to AKD Research, inflation may fall below the SBP’s forecast, driven by subdued demand, improved food supply, and favorable commodity prices. The IMF’s approval, coupled with continued monetary easing, is expected to keep equities attractive, with the market currently trading at a price-to-earnings (P/E) ratio of 3.6 times and offering a dividend yield (DY) of 13.5%.
The Pakistan Stock Exchange (PSX) is likely to remain on investors’ radar as Pakistan navigates external account pressures, benefiting from IMF support and continued monetary easing.
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