Karachi: Bulls dominated the trading session on the Pakistan Stock Exchange (PSX) on Wednesday as the stock hit an all-time high of over 800 points.
The KSE-100 index gained 704 points, or 1.05 percent, to 67,590.26 at 12:01 p.m., from 66,886.26 earlier. It closed at 67,756.03, up 869.77 points, or 1.3 percent, from its previous close.
On March 28, the KSE-100 hit a record high of 67,246.02 points in intraday trade, before settling at 67,142.12. Now, it has conquered two levels.
A day earlier, the figure was short of the Finance Ministry’s forecast of 23.5 percent, the lowest inflation reading in 22 months, as the State Bank is expected to ease policy next month.
Topline Securities CEO Muhammad Sohail said market confidence is increasing with foreign portfolio investments in government securities following good progress in the privatization of Pakistan International Airlines (PIA).
“Cement stocks are now in focus as prices are expected to drop in the coming months.”
Faran Rizvi, head of equity sales at JS Global, said: “The decline in inflation rates is indicative of economic stability, so investors expect interest rates to be cut by at least 150 basis points.”
However, he added that the market “continues to trade in very low volumes in the banking and oil and gas sectors, which are now undervalued compared to historical norms.”
“With the reduction of inflation, the financial burden on these companies will be eased and the natural increase in demand will help maintain positive trading conditions for our industrial stocks,” he said.
Yusuf M Farooq, director of research at Chase Securities, agrees. It is expected that earnings will decrease in value after inflation declines.
Shahab Farooq, director of research at Next Capital Limited, said that apart from the general outlook, the upward trajectory was driven by “foreign portfolio investment in Pakistani rupee-denominated securities” reflecting foreign investors’ confidence in the rupee’s dollar parity. the country is moving into a longer and larger International Monetary Fund (IMF) program.
He also said progress towards restructuring and eventual privatization of PIA helped boost market sentiment.
