PSX jumps over 1,000 points after MSCI adds 15 more Pakistani companies

Development expected to create foreign investors' interest in domestic stock market

KARACHI:

The Pakistan Stock Exchange (PSX) jumped up by 1,000 points to around 48,900 in the early trading hours on Friday.

The market invited the outstanding renewed buying from investors after the global stock market index provider Morgan Stanley Capital International (MSCI) announced to add record 15 Pakistani listed companies into its MSCI Frontier Market Index.

The development is expected to create foreign investors' interest in the domestic stock market.

Later on in the day, PSX benchmark KSE 100 Index dropped to 48,410 points at around 10:50 am, reducing the substantial early morning gains to around 600 points on profit booking.

Read PSX braces for downturn after budget reveal

Topline Securities CEO Muhammad Sohail said in a comment "Pakistan market rallied 1,000 points in early morning trade after MSCI added record Pakistan listed companies in its indices."

He wrote on social media platform X, ”record 15 listed companies being added to the main index of MSCI Frontier Market. Good news for the PSX. In the last six weeks, net foreign buying of $26 million has already been seen at the PSX, and with this news, more is expected."

To recall the market had surged by 20%, or by over 6,000 points to six years high at 49,000 points, in five weeks in the wake of the IMF awarding a $3 billion loan programme to Pakistan in late June 2023.

The market, however, restored to profit selling this week ahead of the interim government set up to hold general elections later in 2023.

The news the elections may delay for a few months invited aggressive selling earlier this week at the PSX, pulling the market below 48,000 points earlier.

Considering a moderate revival in economic growth this year, market experts anticipated the stock market surging to 52,000 points by the end of the current fiscal year 2023-24.

The growth in the market was also projected on expectations for the return of political stability after the elections.