By Salman Khan
KARACHI – The Pakistan Stock Exchange (PSX) on Thursday attained the historic high of 100,346 points on the heels of unprecedented streak of surge in the last one month or so.
As trading began early on Thursday, the KSE-100 index surged by 1,077 points to reach a new milestone.
Also read: PSX peak reflects investors' trust in govt policies, says PM Shehbaz
A day earlier, the PSX witnessed a rally and the KSE-100 index crossed the 99,000 mark. At one point, the index had risen by 1,642 points to reach 99,820 points. However, at the close of trading, the index was reduced to 99,269 points.
The KSE-100 index, which is a key benchmark in PSX, has achieved one milestone after another in November 2024 amid recurring reports of economic stability mainly due to the recent loan disbursement by the International Monetary Fund (IMF).
The reassuring agreement with the international lender and Pakistan economic czar Muhammad Aurangzeb’s subsequent announcement ruling out a mini-budget boosted investor confidence in recent times.
Read more: Stocks just short of 100,000 mark amid surge streak
The stock surge also holds symbolic significance as it is considered an indicator of country’s economic trajectory.
ROAD TO 100,000
The passage to the PSX milestone has not been without bumpers and roadblocks. The latest challenge in the journey came in the form of PTI’s trumpeted protest in Islamabad which created quite a stir in the stock market.
On Tuesday, a day that kept the state machinery on tenterhooks, the trade started on a negative note and the PSX plummeted to 94,181 points after ups and downs amid political uncertainty.
The KSE-100 index closed at 94,181 points after reduction of 3,506 points following days of surge.
Hours earlier, it came close to 100,000 mark by posting 99,820 points while defying political uncertainty.
The situation evolved after stocks plummeted during early morning trading. The KSE-100 index first came down to 97,538 after reduction of 541 points.
Later, it struck back and broke its own record, only to be on the retreat.
Bulls returned to the PSX on Wednesday and the KSE-100 index eventually closed at 99,269 points with an increase of 4,695 points or 4.96pc.
At the start of business, the KSE-100 index reached 98,160 points after gaining hefty 3,357 points.
POSITIVE BEGINNING
The PSX began the first day of the week (Monday) on a positive note as the KSE-100 index surpassed 99,000 mark.
At one point, the KSE-100 index, with an increase of 1,294 points, touched 99,092 figure amid robust trading.
However, it came down to 97,954 around 11:30am. The figure oscillated and eventually the stocks closed at 98,089.
WEEKEND BEST
Bulls were at their raging best on Friday – last working week - when the KSE-100 index came close to the magic 100,000 mark.
The KSE-100 index peaked to 99,623.03 during trading but at midday the market lost some shine and closed at 98,972.43 points after losing 423 points to 1,644.04 (1.69%).
As Friday’s trading eventually came to a halt, the KSE-100 index settled at 97,798 points.
There was enhanced buying in multiple sectors including cement, commercial banks, oil and gas exploration companies, OMCs, pharmaceuticals and power generation.
LET’S HAVE A LOOK AT POSITIVES
Army chief Gen Asim Munir met businessmen in Karachi in the past week while attending IDEAS 2024 exhibition and reassured them of “both economic and political stability”.
NO MINI-BUDGET
One of the main reasons for surge in stock figure is economic stability, especially after the Federal Board of Revenue (FBR) stated a few days ago that the IMF was satisfied with the 1.5 percent improvement in the tax-to GDP ratio.
“As a result, no-mini-budget will be introduced and there will be no imposition of General Sales Tax (GST) on petroleum products,” said an FBR official.
FBR sources say the annual tax target of Rs12,970 billion will be maintained. The tax-to GDP ratio has increased from 8.8 percent to 10.3 percent.
POLICY RATE CUT
Back on Nov 5, the State Bank of Pakistan cut the policy rate by 250 basis points to 15 percent.
SBP’s relevant committee noted that inflation had declined faster than expected and reached close to its medium-term target range in October.
It assessed that the tight monetary policy stance continued to play an important role in sustaining the downward trend in inflation.
CURRENT ACCOUNT SURPLUS
The State Bank of Pakistan says Pakistan’s current account surplus rose to $349 million in October 2024 compared to a deficit of $287 million in the same month of the previous year.
This was the third consecutive month of a current account surplus.
TOP 25 COMPANIES
The PSX recently announced a list of Top 25 companies which were awarded for their performance in 2023.
The companies are selected on the basis of their financial performance, governance and operational achievements as well as Sustainability and ESG related initiatives.
The companies are: Engro Corporation Limited Engro Fertilizers Limited Fauji Fertilizer Company Limited Hub Power Company Limited Bank Alfalah Limited Habib Bank Limited Habib Metropolitan Bank Limited Mari Petroleum Company Limited Systems Limited Cherat Cement Company Limited Lucky Cement Limited Meezan Bank Limited Engro Polymer & Chemicals Limited Pakistan Oilfields Limited Image Pakistan Limited MCB Bank Limited Faysal Bank Limited Nestle Pakistan Limited Adamjee Insurance Company Limited Indus Motor Company Limited International Industries Limited United Bank Limited Pakistan State Oil Company Limited Security Papers Limited Bank AL Habib Limited.