A stock broker looks at a computer during a trading session at the Pakistan Stock Exchange (PSX) in Karachi on July 31, 2023. — AFP

PSX rises on positive indicators

by Pakistan News
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A stock broker looks at a computer during a trading session at the Pakistan Stock Exchange (PSX) in Karachi on July 31, 2023. — AFP

The capital market surged on Friday, driven by clarity on the political front and robust economic indicators.

Investor confidence soared following the long-anticipated verdict in the £190 million case, delivered by an accountability court against former prime minister Imran Khan and his wife, Bushra Bibi, which brought an end to weeks of uncertainty and speculation.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index surged 1,519.38 points, or 1.33%, to reach an intraday high of 115,356.12.

By midday, the index demonstrated resilience, driven by an improving balance of payments position and the renewed confidence stemming from the judicial decision.

“The market is trading up today after the decision by the courts. The verdict ends the prevalent uncertainty that had created an overhang for the last two weeks,” said Ismail Iqbal Securities CEO Ahfaz Mustafa.

He added: “The current account surplus posted in the morning also helps jog market sentiment, giving investors surety that the government is still staunchly following the IMF plan and staying the path.”

Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, added: “Better-than-expected balance of payment numbers supported market sentiment.”

In a long-anticipated decision, Accountability Court Judge Nasir Javed Rana convicted former Prime Minister Imran Khan and his wife, Bushra Bibi, sentencing them to 14 and seven years in prison, respectively.

The court also imposed hefty fines on the couple. This verdict, while politically significant, provided market participants with a sense of closure, removing an element of political uncertainty.

The State Bank of Pakistan (SBP) announced the UAE’s rollover of $2 billion in deposits, providing much-needed fiscal relief. Prime Minister Shehbaz Sharif confirmed the development earlier this week following discussions with UAE President Sheikh Mohamed bin Zayed Al Nahyan.

Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, added: “Better-than-expected balance of payment numbers supported market sentiment.”

Pakistan’s foreign exchange reserves increased by $30 million to $11.725 billion for the week ending January 10, bolstered by a current account surplus of $944 million during the first five months of FY25.

This marks a significant turnaround from the $1.67 billion deficit during the same period last year. Workers’ remittances also surged by 33%, reaching $17.8 billion in the first half of FY25, compared to $13.4 billion during the same period last year.

The government’s ongoing efforts to stabilise the economy include plans to issue yuan-denominated Panda bonds, expected to raise $200-$250 million from Chinese investors by the end of the fiscal year. Finance Minister Muhammad Aurangzeb expressed optimism about meeting the IMF’s bailout conditions and noted the positive trajectory in sovereign credit ratings.

Stocks fell for the second consecutive session on Thursday, with the benchmark KSE-100 index decreasing by 659 points amid a lack of positive triggers.

KSE-100 index decreased by 658.96 points or 0.58% to 113,836.74 points against 114,495.71 points recorded in the last session. The highest index of the day remained at 114,884.63 points, while the lowest level was recorded at 113,630.45 points.


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