The capital market started Wednesday’s session on a positive note, making a strong recovery after two days of consecutive losses. The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index rose by 1,697.54 points, or 1.46%, reaching an intraday high of 117,750.22 points. This upward correction follows a sharp drop of 2,500 points the day before, providing much-needed relief to investors.
The initial boost in the market was attributed to the recovery of energy stocks, which had been hit hard in previous sessions. Ismail Iqbal Securities CEO Ahfaz Mustafa explained that the market’s rebound was largely due to an upwards correction after the significant decline and the positive performance of energy stocks.
PM’s Visit and Market Optimism
Another key factor driving optimism in the market was the expected visit of Prime Minister Shehbaz Sharif to the Pakistan Stock Exchange. The premier is in Karachi for a day-long visit and is scheduled to award the PSX the title of the world’s second-best-performing stock exchange in 2024. This recognition has boosted investor sentiment and contributed to the market’s rebound.
Furthermore, during a cabinet meeting on Tuesday, PM Shehbaz announced the rollover of a $2 billion loan deposit from the United Arab Emirates (UAE), which provides much-needed fiscal relief to the government. These developments have given investors confidence, pushing the market higher.
Read More: Prime Minister Shehbaz Sharif’s Day-Long Visit to Karachi
Government’s Economic Measures and Market Impact
In addition to the PM’s visit, another factor fueling the market’s positive movement is the government’s plan to rightsize 42 ministries and 400 attached departments by June 30, 2025. The initiative aims to reduce expenditures and improve government efficiency. Finance Minister Muhammad Aurangzeb revealed that the government plans to bring five or six departments under rightsizing in each phase. This move is expected to reduce unnecessary government spending and has a positive financial impact.
Additionally, the government has taken steps to reduce vacant positions, with 60% of vacant regular posts, totaling 150,000, being abolished or classified as “dying posts.” These decisions are aimed at streamlining the government’s operations and improving financial management.
Despite positive market movements, the government’s debt levels remain a concern. The State Bank of Pakistan (SBP) reported an increase in the government’s total debt by Rs1.452 trillion, or 2.1%, in the first five months of FY25. As of November 2024, the total debt stands at Rs70.366 trillion, driven by high government spending and the need to repay external debt.
Closing Thoughts on Market Trends
The KSE-100 Index had closed the previous session on a negative note, losing 202.44 points, or 0.17%, to end at 116,052.68 points. However, the market’s strong performance on Wednesday indicates a possible recovery, fueled by positive news such as PM Shehbaz’s visit and the government’s fiscal measures. Investors are closely watching these developments, hoping for sustained growth as the country navigates through economic challenges.
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