KARACHI: Investors at the Pakistan Stock Exchange (PSX) witnessed a remarkable surge on Thursday as the KSE-100 index jumped by nearly 500 points, reaching a new all-time high. This rally was fueled by expectations of a credit ratings upgrade, upcoming Saudi investments, and increased foreign interest through MSCI index inclusions.
The market saw a positive lift from multiple factors, including anticipation of a potential credit ratings upgrade. Finance Minister Muhammad Aurangzeb’s recent statements on economic stability have led investors to believe Pakistan’s rating will soon improve. Additionally, the MSCI’s announcement to revise Pakistan’s weight in its Frontier Markets Small Cap Index to 4.4% has attracted interest, suggesting further foreign inflows.
Top analyst Ahsan Mehanti, Managing Director of Arif Habib Corp, explained the bullish trend: “Stocks closed at a record high due to anticipated ratings upgrades and increased weight in the MSCI index, which shows strong market performance and liquidity.”
IMF Visit Adds Confidence
The market’s outlook was also bolstered by the upcoming visit from the International Monetary Fund (IMF) mission next week. The IMF team will review Pakistan’s progress under the $7 billion Extended Fund Facility, keeping investor hopes alive for continued economic support.
Sukuk Yield Fall and Strong Trading
A drop in Sukuk yields added further support to the market rally. Recent auctions saw yields on one-year Ijara Sukuk bonds fall to 10.99%, indicating a possible reduction in interest rates across all government bonds. This shift has encouraged investors, who view it as a sign of easing lending rates.
Topline Securities commented on this development, noting, “The KSE-100 opened on a strong note, reaching an intra-day high as lower Sukuk yields signal broader declines in upcoming T-bill and PIB yields.”
Saudi Investment Potential Sparks Interest
The recent visit by Pakistan’s Prime Minister to Saudi Arabia has also played a role in the PSX’s positive sentiment. A Saudi delegation led by Pakistan’s energy minister is expected to bring new investments, potentially in projects like Reko Diq. This anticipation has increased interest in key stocks, including Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL).
Top Gainers and Active Trading
Major contributors to the KSE-100 index gains included Dawood Hercules Corporation (+7.58%), OGDC (+2.62%), and Engro Corporation (+2.92%). However, some stocks, like Systems Limited (-2.04%) and Habib Bank Limited (-1.4%), dragged slightly on the index.
Arif Habib Limited’s report highlighted that KSE-100 was gaining traction, posting a 1.8% week-on-week increase. “Investor optimism across sectors and rupee stability were key drivers,” the report stated.
Strong Sectoral Performance
Trading volumes remained high at 679 million shares, though slightly down from the previous day’s 889.2 million. Major trading activity was concentrated in fertilizer, oil, and power sectors, with shares of 449 companies traded. Of these, 257 stocks closed in positive territory, 145 in the red, and 47 unchanged.
Volume Leaders of the Day
The Bank of Punjab led the trading volume, with 62.9 million shares changing hands, rising by Rs0.36 to close at Rs6.57. Other active stocks included Kohinoor Spinning Mills and K-Electric, which gained Rs0.54 and Rs0.16, respectively.
Foreign Investor Participation
Foreign investors were active, purchasing shares worth Rs30.98 million according to the National Clearing Company of Pakistan Limited (NCCPL).
