The Pakistan Stock Exchange (PSX) witnessed its third consecutive session of bullish dominance on Monday, propelling the benchmark index to achieve yet another historic high. The surge in share prices to record levels was attributed to positive factors such as robust data on exports and home remittances. Additionally, a decline in bond yields during the latest Pakistan Investment Bonds auction further fueled the rally.
Market analysts, including Ahsan Mehanti from Arif Habib Corporation and Khurram Shehzad, CEO of Alpha Beta Core Ltd, pointed to encouraging developments such as the “on track” review of the Stand-by Arrangement with the International Monetary Fund (IMF). This, coupled with the anticipation of interest rate cuts in 2024, has contributed to the buoyant market sentiments. Shehzad emphasized that while short-term recovery is apparent, sustained growth in the medium to long term hinges on crucial structural reforms in energy, debt, state-owned enterprises, and taxation.
The PSX’s remarkable ascent, crossing the 56,000-point milestone, represents a swift recovery in the total value of shares, soaring from $20 billion to $28 billion in less than six months. Despite this impressive feat, Mohammed Sohail, CEO of Topline Securities Ltd, noted that the PSX remains one of the smallest markets, with a market capitalization-to-GDP ratio of less than 10 percent.
JS Global Capital Ltd highlighted that the upcoming momentum in the stock market is expected to be driven by the IMF agreement and a shift in holdings from fixed-income funds to equity-based funds by asset management companies, and major investors on the PSX. The recommendation for investors to adopt a “buy-on-dips” strategy in technology, exploration and production, and cement sectors reflects a positive outlook.
The KSE-100 index concluded at 56,523.58 points, registering a substantial gain of 1,132.21 points or 2.04 percent from the previous session. With a 3 percent increase in overall trading volume and a 5.9 percent surge in traded value, the market dynamics continue to reflect investor confidence and sustained momentum.