PSX surges past record 60,000 milestone

The benchmark index of the Pakistan Stock Exchange (PSX) continued its bullish run on Tuesday to cross the 60,000 barrier in a record high.

At closing, the KSE-100 index’s trade volume increased by 918.92 points, or 1.54 per cent, standing at 60,730.26 from the previous close of 59,811.34.

The index reached a high point of 60,845.60 points at 3:30pm, while the lowest was 60,023.8 around 9am.

The benchmark KSE-100 index had sustained its rally from the previous week, which analysts had attributed to attractive valuations, corporate profits, reduced economic volatility, and the successful conclusion of a staff-level deal with the International Monetary Fund (IMF).

Moreover, experts predicted a continuing positive momentum amid expectations of “peaked out inflation and monetary easing onwards”.

Sana Tawfik, deputy head of research at brokerage and investment banking firm Arif Habib Limited, attributed the rally to the International Monetary Fund’s (IMF) inflows expected next month and strong fundamental performances of sectors along with attractive valuations.

In addition to this, she also noted there were “expectations of interest rate reversal cycle — this makes equity market attractive hence allocations of funds shift from fixed income to equities”.

Tahir Abbas, head of Research at Arif Habib Limited, said: “Investors sentiment remained positive across the board as participants expected inflation and interest rates to decline going forward.”

He added, “The major positivity for the investors is the fact that market valuation is still very attractive and the market is trading at a significant discount to historical averages.”

Capital market expert, Mohammad Saad Ali, identified the main bull market drivers to be the disbursement of the IMF tranche, in addition to the positive market outlook, strengthened by expectations of an interest rate cut in the next monetary policy meeting due in December.

He further noted that the rupee had stabilised against the dollar after depreciating against it, which sustained the rally.

Mohammed Sohail, chief executive of Topline Securities, credited the bullish run to “low valuation coupled with foreign buying”, highlighting the growing positive sentiment of investors in the economic outlook of the country in addition to an interest rate cut in the near future.

He added that the index had gained 50pc in only five months, making a jump from 40,000 to 60,000. He highlighted that “this is the fastest 50pc rise in a few months after 2004.”