https://arab.news/6wgfy
- KSE-100 index climbs 952 points or 1.12 percent to stand at 91,001.73 points during inter-day trading
- Analysts say bullish trend fueled by “banks and fertilizer companies” backed by strong dividend yields
ISLAMABAD: In yet another historic high, the Pakistan Stock Exchange (PSX) crossed the 91,000-points barrier during intra-day trading on Monday afternoon, with analysts saying the prevalent bullish market trend was driven mostly by banks and fertilizer companies “backed by their strong dividend yields.”
As per figures shared by the stock market’s official website, the benchmark KSE-100 index climbed 952 points or 1.12 percent to stand at 91,001.73 points during the day at 12:08 pm, up from the previous close of 89,993.96 points on Friday.
“The rally has thus far been mostly driven by banks and fertilizers, backed by their strong dividend yields,” Raza Jafri, the chief executive officer of leading financial services corporation EFG Hermes Pakistan, told Arab News.
“But, there are signs of a rotation into other sectors also, as such oil and gas exploration, pharmaceuticals, and cement as their profitability picks up.”
Jafri said foreign investors had sold $17 million of Pakistani equities in CY24TD (calendar year till date), adding that they were now buying Pakistan equities back.
“Liquidity dynamics are strong on both the foreign and domestic side, which is resulting in valuation rerating for the KSE100 (valuations are still at a 40% discount to the long-term mean),” he explained.
Meanwhile, leading stock market mobile app Investify Pakistan said the continuing upward trend during early trading on Monday was “fueled by optimism about an upcoming monetary policy rate cut.”
The development comes as the South Asian nation’s economic indicators continue to improve after it secured a $7 billion, 37-month bailout package from the International Monetary Fund (IMF) in September. Pakistan’s central bank also cut its key policy rate by 200 basis points to 17.5 percent in September, making it the third straight reduction since June.
Last year, Pakistan narrowly avoided a sovereign default when it clinched a $3 billion IMF loan program. The country has suffered a prolonged economic crisis that drained its foreign exchange reserves and saw its currency weaken amid double-digit inflation.