According to a report by Arif Habib Limited, the Pakistan Stock Exchange (PSX) had an impressive week after the Eid holiday, earning the title of the “world’s best performing market” for the second consecutive week. The stock index showed significant growth, crossing the 44,000-point mark with a gain of nearly 2,800 points. This positive trend was driven by investors taking advantage of the agreement reached with the International Monetary Fund (IMF).
The week began on a high note with a substantial daily gain on Monday, as investors responded positively to the long-awaited staff-level agreement with the IMF. However, profit-taking by institutions caused a temporary bearish trend on Tuesday, despite a major recovery following the IMF deal.
On Wednesday, concerns over liquidity risks and the depreciation of the Pakistani rupee led to a relatively flat market closing. Nevertheless, Thursday saw a return to positive territory as investors anticipated the IMF’s approval of a $3 billion loan in its upcoming executive board meeting, which generated buying interest.
The final trading session remained positive as investors found support from Pakistan’s increasing foreign currency reserves, despite the absence of significant positive factors. As a result, the benchmark KSE-100 index surged by 2,755 points, closing at 44,207 for the week following Eid.
Muhammad Waqas Ghani, an analyst at JS Global, highlighted the investor enthusiasm triggered by the government’s agreement with the IMF, which fueled market optimism. Notable sector-wise performances were observed in the refinery, technology, and engineering sectors during the week.
In terms of trade figures, Pakistan witnessed a significant reduction in the trade deficit for FY23, which narrowed by 43% year-on-year to $27.5 billion. Additionally, the market reacted positively to the government’s disbursement of Rs142 billion to settle dues with Independent Power Producers (IPPs).
Foreign investors displayed increased buying activity during the week, with a total of $4.7 million invested. However, local banks/DFIs and companies reported selling activities. The average trading volumes and value traded also experienced substantial increases compared to the previous week.
Overall, the Pakistan Stock Exchange showcased a strong performance, maintaining its position as the world’s best performing market with a significant weekly return.
