The Pakistan Stock Exchange (PSX) reached unprecedented heights on Friday, crossing the 77,000 mark as it gained over 1,000 points during intraday trading. The benchmark KSE-100 index achieved a historic peak of 77,213.31 points, rising by 1,005.15 points or 1.32% from Thursday’s close of 76,208.16 points.
This surge follows a strong rebound in the market since the announcement of the 2024-25 budget. The anticipated hike in Capital Gains Tax (CGT) did not materialize, alleviating investor concerns and boosting market confidence. Saad Ali, Director of Research at Intermarket Securities, emphasized the positive impact of this development while speaking to Geo.tv. “The market has rebounded sharply since the budget announcement, primarily because the feared increase in CGT was not implemented,” Ali said.
Investor sentiment has also been buoyed by renewed expectations of a revival of talks with the International Monetary Fund (IMF) for a new financial program. The anticipation of an IMF agreement has contributed to the market’s optimistic outlook, Ali added.
On Thursday, the stock market had already demonstrated significant momentum, reaching an all-time high of 76,208.16 points. This marked an extraordinary leap of 3,410.73 points or 4.69% in a single day, showcasing the market’s robust performance.
“The market was expecting an increase in capital gains tax, and so investors had reduced exposure significantly,” Adnan Sheikh, Assistant Vice President of Pak Kuwait Investment Co, told Reuters.
The budget for 2024-25 aims for a modest growth rate of 3.6%, a strategic move designed to balance the IMF’s requirements with the nation’s fiscal challenges, including heightened taxation. This fiscal plan is intended to strengthen Pakistan’s case for a new bailout deal from the IMF, with the country seeking an estimated loan between $6 billion and $8 billion to avoid default in an economy currently growing at the slowest pace in the region.
Leave a Reply