On Friday, the Pakistan Stock Exchange (PSX) witnessed a historic surge as the KSE-100 index surged by 914 points during intraday trading, reaching an all-time high. The index hit a significant milestone by surpassing the 95,000-point mark for the first time in history, closing at 95,090 points after reaching a peak of 95,106 points earlier in the session.
By 11:11 AM, the KSE-100 index had already risen by 532.44 points, or 0.57%, to reach 94,724.33 points, compared to its previous closing of 94,191.89 points. The rally continued into the afternoon, with the index climbing an additional 768.01 points, or 0.82%, to reach 94,959.90 points by 12:06 PM.
Analysts have attributed the bullish market performance to a combination of factors. Mohammed Sohail, Chief Executive of Topline Securities, pointed to continued buying activity by local funds following a sharp decline in interest rates. He also noted the positive impact of a staff visit from the International Monetary Fund (IMF), which signaled growing economic stability in the country.
Awais Ashraf, Director of Research at AKD Securities, highlighted that the rally was further supported by a stay order granted to banks regarding the implementation of the ADR tax. He noted that the easing of monetary policies and improved cash flows for companies affected by circular debt were driving the market’s upward momentum.
Ashraf believes that equities will continue to outperform, citing an attractive price-to-earnings ratio of 4.2x, particularly as returns on fixed-income instruments and commodities trend downward.
Yousuf M. Farooq, Director of Research at Chase Securities, emphasized the role of increased cash inflows into equities, driven by lower returns on fixed-income mutual funds. He also pointed to early signs of macroeconomic stabilization, including reduced circular debt and increased sales in sectors like automotive and fast-moving consumer goods (FMCGs).
Farooq also noted increased activity in the property market, with a rising sense of urgency among buyers fearing they might miss out on potential gains. Additionally, the growing use of online trading accounts and the modest growth in equity mutual funds relative to total assets under management have contributed to a surge in market participation.
With these positive indicators, the KSE-100 index’s performance is expected to continue to impress in the coming months.
