Bullish stocks propel KSE-100 Index over 58,000, rupee makes gains against dollar
Business
The market is continuing moving upward with a belief that there won’t be no more rate hikes
KARACHI (Web Desk/Dunya News) – The Pakistan Stock Exchange remained bullish on Wednesday with a 1.44 per cent surge, as the rupee too performed well against the US dollar amid improved macroeconomic indicators.
It means the improvement in investors’ confidence made the KSE-100 breach another ceiling and setting a new high in its history after a successful review of the $3 billion stand-by arrangement gave a clear message that the government would have to deal with issues like circular debt and reforming the energy sector.
At the same time, privatisation of loss-making state-owned enterprises is also on the cards, pointing to an imminent inflow of foreign investment besides providing the much-needed opportunity to the local investors to explore new ventures.
By the time the session was closed, the benchmark KSE-100 Index had settled at 58,198.76 after climbing to 58,266.44 during intraday trading, which reflects an 825.18 points gain with the oil and gas exploration and marketing companies along cement and fertilizers sectors leading the way.
On the other hand, the local currency was up by 67 paisa in official exchange rate against the US dollar and available for Rs285.12.
Hence, the Pakistan rupee has been able to not only halt but also reverse the decline it witnessed against the US dollar where it slumped to Rs288.14 on Nov 15 after a weeks-long surge, enabling it to recover from a record-low of Rs307.10 to reach Rs276.83.
Meanwhile, the rupee had an upper hand in the open market too where the local currency was up by 25 paisa, resulting in an exchange rate of Rs286.75 for the dollar.
A GOOD OMEN
Certainly, the signs are great for the stock market which is becoming more and more lucrative for investors when compared with unproductive real estate sector, which first witnessed stagnation and later went into a decline.
Various factors are responsible for this, but the main reason is overinvestment in both commercial and residential properties – considered a safe haven, especially amid the economic turmoil Pakistan is facing.
Moreover, the rising stocks will certainly also discourage investment in safe haven currencies like dollar and assets like gold.
One must recall that Pakistan has one of the worst, if not the worst, ratio of people investing in stocks when compared with the rest of the world. The reason is simple: real estate, gold and safe haven dollar provide an easy way to earn profit.
This mindset has resulted in ignoring the manufacturing as well as research and innovation – the pre-requisites for a developed and sustainable economy – both individual and institutional levels.
Investment in stock market is a great sign for Pakistan’s economy as it will also lead the listed companies to expand their businesses, creating new job opportunities amid the rising unemployment rate.
Pakistan’s economy has been battered by the record-high inflation and interest rates, which means there is very little or no economic activity that can help the people lessen the cost-of-living crisis by getting new jobs or enhanced wages.
