Pakistan’s stock market records highest closing as inflation eases, investment in securities increases
03 April 2024
Published in: Arab News
Pakistan’s stock market recorded its highest ever closing at 67,756 points when trading ended on Wednesday, with financial analysts attributing the surge to expectations of a cut in the central bank’s policy rate and an increase in foreign investment in government securities.
The KSE-100 index on Mar. 28 hit a record high of 67,246.02 points during intraday trade before closing at 67,142.12. Analysts had attributed the surge last week to investors’ expectations of Pakistan reaching another long-term agreement with the International Monetary Fund (IMF).
As Pakistan’s economic indicators register a slight improvement, stock buyers now expect cuts in the interest rate in the next monetary policy, fueling positive sentiments at the bourse.
“Stocks closed at an all-time high on speculations over the State Bank of Pakistan’s policy easing after the CPI inflation fell to 20.7 percent in March 2024,” Ahsan Mehanti, chief executive officer of Arif Habib Corporation, one of Pakistan’s leading business groups, told Arab News.
Mehanti pointed out that cement sales surging by 3.85 percent on an annual basis, petroleum products’ sales rising by 4 percent and textile exports growing by 3 percent, and the surge in global crude oil prices contributed to the bullish close at stock market.
Shaharyar Butt, portfolio manager at securities brokerage firm Darson Securities, said encouraging developments at the economic front had also fueled positive sentiments at the stock market.
“We saw a very positive day at the stock market which remained bullish throughout the day and closed at historic high level,” Butt told Arab News.
“The market hit an intraday high of 67,873 level with a gain of 986.95 points and managed to close at 67,756.03 level, up by 869 points.”
According to Topline Securities, the cement sector stole the spotlight, spearheading the market’s upward trajectory on Wednesday.
US dollar inflows in Pakistan through Treasury bills (T-bills) hit a 4-year high in March 2024, with the country attracting a net inflow of $82 million last month.
Pakistani analysts say foreign investment in government treasuries is an encouraging development that is fueling positive sentiments at the bourse.
“The major development after a long time is that the investors are making investment in the Pakistani rupee through Treasury Bills,” Butt said. “It is stirring positive sentiments at the stock market which was also reflected in today’s trading.”
