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KSE-100 sets another all-time high amid foreign investment news, rate cut hopes

KSE-100 sets another all-time high amid foreign investment news, rate cut hopes

Business

Market is showing a persistent upward movement after investors shifted their focus to stocks

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KARACHI (Web Desk) – The Pakistan Stock Exchange continued with its record-breaking streak after the benchmark KSE-100 Index passed the 62,000 mark during early trading on Monday, starting the new week on a high amid imminent arrival of foreign investment from the Gulf States.

However, the KSE-100 Index settled at 62,493.05 after a 801.80, or 1.30 per cent, gain by the time the session was closed for the day.

During the intraday trading, it had earlier reached a high of 62,912.61 against the previous closing value of 61,691.25.

With the UAE and Saudi Arabia all set to include Pakistan in their current global investment spree list, the local investors are hoping the share prices in energy and banking sector will get the much-needed boost after a long period of remaining undervalued.

The market capitalisation is already on the rise due to the ongoing surge as the amount was recorded at over Rs8.88 trillion [Rs8,885,359,389,922] on Dec 1 – Friday last week [trillion = 1,000 billion]. The latest figures for Monday (Dec 4) will provided on its website later in the evening as per routine.

It represents a marked increase [around 22pc] when compared with the total value of more than Rs6.50tr [Rs6,500,828,000,000] registered on Dec 30, 2022 – the last working day of the calendar year.

Meanwhile, investors are also confident that the State Bank of Pakistan (SBP) will soon go for rate cuts, or at least isn’t going for further hikes, although the high consumer price index (CPI) recorded in November dented the hopes of a sustainable dip in inflation.

 

The latest figures released by the Pakistan Bureau of Statistics (PBS) shows that inflation is not only sustaining but also witnessed an increase on year-on-year basis as the CPI in November reached 29.2pc when compared with the same month on 2022, with no signs of a lessening cost-of-living crisis which has pushed millions on poverty in Pakistan.

Read more: Inflation in Nov surges to 29.2pc year-on-year, misses SBP and govt estimates

It means those waiting for rate cuts would have to wait longer as the rate hikes have been justified globally, barring Japan, to arrest the rising prices – a formula that resulted in economic slowdown and possibility of worldwide recession.

This trend is an obvious product of the hikes in gas and electricity tariffs which are consuming the large chunk of the working and middles classes’ monthly incomes, leaving very little room for ensuring nutritious food for their families.

With it comes to the annual targets, the government sees it around 21pc during 2023-24 while the International Monetary Fund (IMF) estimates at 25.9pc.

Moreover, the latest data dents the projections made by the State Bank of Pakistan which had estimated inflation to hover around 20pc-22pc during the current fiscal year. However, the monthly average for the first five months now stands at 28.6.

However, the market in Pakistan is seemingly immune to the persistent inflationary pressure and a crippled economy as the investors have now turned to the stocks after rupee got stronger amid strict government measures and the saturated property witnessed a decline, making it unattractive.

However, the latest record-breaking surge in gold prices may attract some of them back towards the safe-haven asset.
 

It’s a developing story. Details to follow
 




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