The Pakistan Stock Exchange (PSX) achieved a historic milestone on Monday as it soared to an unprecedented all-time high of 69,711 points, marking a remarkable 1.9% surge. This surge continued the record-breaking spree witnessed on the second working day of the week.
The market’s buoyancy has been fueled by economic optimism, with investors reacting positively to Prime Minister Shehbaz Sharif’s inaugural visit to Saudi Arabia and Finance Minister Muhammad Aurangzeb’s forthcoming trip to Washington to formally request a new IMF loan program.
At the close of the session, the benchmark KSE 100-Index settled at 69,620 points, reflecting a substantial increase of 1,203 points or 1.76% from its intra-day high.
Since the February 8 elections and the subsequent formation of a coalition government, the market has witnessed a significant upswing, gaining 8.5% or 5,476 points.
Investor sentiment has remained robust, particularly in the energy and banking sectors, amid expectations of resolving longstanding issues such as the energy crisis and circular debt. The surge in banking stocks can be attributed to record-breaking earnings reported by banks.
Tahir Abbas, Head of Research at Arif Habib Limited, highlighted the market’s exceptional performance, attributing it to anticipated investment agreements worth billions of dollars between the government of Prime Minister Shehbaz Sharif and Saudi Crown Prince Muhammad bin Salman.
These potential investment treaties, which may include projects such as Reko Diq and refineries in Pakistan, are expected to invigorate foreign investment in local projects, which has been sluggish in recent years.
Furthermore, Finance Minister Muhammad Aurangzeb’s scheduled approach to the IMF for a new loan program at the Fund’s annual meeting in Washington on April 14-15 has bolstered optimism among investors. It is believed that the new loan package will facilitate timely repayment of maturing foreign debts and stimulate economic activities.
Despite the recent record-breaking spree, share prices have not yet reached their previous peak levels, providing investors with ample opportunities for value buying.
Looking ahead, Abbas projected a continued upward trend in the market fueled by optimism surrounding the acquisition of the new IMF package and stocks still trading below their historical highs.
“We anticipate the PSX benchmark index to reach 81,000 points by the end of December 2024,” Abbas concluded, underlining the market’s bullish outlook.
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