The Pakistan Stock Exchange posted a sharp uptrend this week when the KSE-100 Index broke its previous record on Monday. In the early hours of the session, it went up by 526 points, or 0.59%, to 11. As much as the short-term breach saw the index touch the magic figure of 94,000 for a while before closing at 93,648.32 points, the day’s intra-day high touched 94,020.02 points, with the market closing with an increase of 356.64 points, or 0.38%.
It was more of a response to the recent 2.5 percentage points cut in the policy rate by the State Bank of Pakistan announcement many analysts took to be in the direction of increasing liquidity and, consequently, stability for the economy. Investor confidence surged and the market galloped ahead. The KSE-100 index has gained over 2,400 points during the last week, and it closed at a record closing of 93,292 on Friday-2.7% higher than the previous week.
Relatedly, the government managed to attract superfluous capital in its last Ijarah Sukuk auction even though the yields dipped across tenors. The momentum just continues as the workers’ remittances have bounced up to $3.1 billion, whereas the SBP witnessed a slight increase in foreign exchange reserves at $11.17 billion.
This support mirrors optimism for Pakistan’s newly upgraded representation in the MSCI Frontier Markets Small Cap Index, which will attract more foreign investments. A delegation led by Pakistan’s Prime Minister Shehbaz Sharif’s government met Saudi Arabia to finalize agreements worth $2.8 billion.
Market analysts are optimistic about the PSX’s further growth, provided the rupee remains stable and Pakistan has positive discussions with the IMF.
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