PSX: Mixed momentum in August 2024 amid IMF fund hopes

KARACHI: The KSE-100 index of the Pakistan Stock Exchange (PSX) showcased mixed momentum during Aug 2024, clinging on to the expectation of approval of the International Monetary Fund (IMF’s) extended fund facility (EFF) programme and disbursement of loans.

At the start of the month, Pakistan secured one-year debt rollover commitments from China, Saudi Arabia, and UAE, a crucial step before the final approval of the USD 7 billion loan programme. Furthermore, in the Morgan Stanley Capital International (MSCI) review Pakistan’s weight in the Frontier Markets (FM) space increased to 3.9%, said Arif Habib Limited report.

On August 30, the Pakistan Stock Exchange (PSX) rose for the second consecutive session, with its benchmark KSE-100 index gaining 138.55 points, or 0.18%, to close at 78,488.21. The index remained positive throughout the day, according to Mettis Global.

The day saw a robust trading volume of 680.8 million shares, with a total value of Rs 21.19 billion. The market activity was spread across 281,386 trades, reflecting sustained interest from both institutional and retail investors.

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Among the important factors for the PSX in August 2024, the T-bill auctions during the month showcased a significant drop across the tenors, increasing expectations of a rate cut in the Monetary Policy Committee (MPC) meeting in September 2024. Whereas, Moody’s upgraded Pakistan’s rating to Caa2 from Caa3. However, the absence of Pakistan from the IMF’s Executive Board schedule in August 2024 brought a few jitters to investors sentiment.

The State Bank of Pakistan (SBP) reserves climbed up by USD 111.6 million month on month to USD 9.4 billion. As the market closed at 78,488 points, gaining 601 points, +0.8% month on month. Average daily volumes during August 2024 settled at 538 million shares, up 32% month on month, while the average daily traded value decreased by 3% to USD 67 million.

Foreign investors bought shares worth USD 7.2 million predominantly in Exploration and Production companies (E&Ps) with USD 2.9 million, Technology with USD 2.7 million, Foods with USD 2.7 million, Banks with USD 2.3 million and Power with USD 1.9 million while net selling of USD 2.6 million, USD 1.7 million and USD 0.5 million is witnessed in Cement, Fertilizer and other sectors respectively.