That is indeed a rodeo that never was. The bulls are unstoppable. And the result is that the Pakistan Stock Exchange Index, the PSX, has rocketed through the ceiling, breaching the 70,000 milestone to touch an all-time high. The index closed at 70,314.71 on Tuesday — up by 694.73 or 1 per cent from the previous close. Over the past one year, the index has risen by around 30,000 points or nearly 43%, as it was placed at 40,295 on April 13, 2023.
Optimism over investment from Saudi Arabia has mainly to do with the index hitting a record high, while charging ahead in four consecutive sessions. Saudi Arabia has committed to fast-tracking an initial $5 billion tra¬nche of an overall investment worth $25 billion to be made in Pakistan. It came during a meeting between Prime Mini¬ster Shehbaz Sharif and Saudi Crown Prince Mohammed bin Salman in Makkah last Sunday.
Other factors that have served to fuel positive sentiments on the bourse include high remittances — $3 billion in March as compared to $2.25 billion in the preceding month of February and $2.54 billion in March 2023. The bulls’ rampage is reflective of the positive direction the economy is taking. Pakistan last month successfully secured the last tranche worth $1.1 billion of the $3 billion Stand-by Arrangement with the IMF, and looks set to secure another bailout package of $6-8 billion.
Also, the government’s pursuance of the tough IMF conditionalities to achieve macroeconomic stability and avert a default on its foreign financial obligations has helped boost the investor confidence. Thus there has been continued foreign buying — something that has propelled the index to unprecedented heights. However, factors like political instability and anticipated rise in inflation due to the recent hike in power, gas and petrol prices do pose serious challenges to the prevailing positive sentiments.
Published in The Express Tribune, April 13th, 2024.
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