PSX hits record high as KSE-100 crosses 82,000

Declining bond yields, strong investor confidence drive historic surge

KARACHI:

The Pakistan Stock Exchange (PSX) witnessed a historic performance on Friday as the benchmark KSE-100 index surged past the 82,000 mark during intra-day trading. This remarkable rise coincided with a sharp decline in yields on Pakistan Investment Bonds (PIBs), particularly in the three-year tenure, which saw a drop of 335 basis points.

The drop in bond yields is part of a broader trend of easing interest rates, largely due to receding inflation and the government's efforts to reduce borrowing costs. This move aims to lessen the burden of debt servicing, a significant strain on tax revenues.

Bloomberg recently recognised the PSX as the world's best-performing stock market in 2024, crediting this achievement to strong foreign investment and improving economic conditions. The report highlighted that Pakistan's improved current account balance, alongside the central bank's decision to cut interest rates, played a pivotal role in bolstering investor confidence.

Trading kicked off on a positive note, with the KSE-100 index crossing the 82,000 mark before noon, reaching an intra-day high of 82,372.20 points. However, some selling pressure emerged in the latter half of the day, trimming gains as the index touched an intra-day low of 81,387.57 points. Nevertheless, the market closed strong at 82,074.45, up by 615.16 points (0.76%).

Ahsan Mehanti, Managing Director of Arif Habib Corp, noted that the sharp decline in PIB yields, combined with receding inflation and improving liquidity, further stoked expectations of an interest rate cut by the State Bank of Pakistan (SBP). He added that robust economic data, including a $75 million current account surplus, rising remittances, stable RDA inflows, and a stronger rupee, helped fuel the bullish close.

Topline Securities commented that the index largely stayed in the green, reaching an intra-day peak of 913 points before settling at 82,372. This positive momentum was driven in part by lower-than-expected selling during the FTSE Russell reclassification, which shifted Pakistan from Secondary Emerging to Frontier Market status.

Arif Habib Limited (AHL) highlighted that the week's close above 82,000 reflects the market's alignment with the typically bullish trend for September, noting a weekly gain of 3.36% for the index. Heavy trading was observed in the afternoon session, with both domestic and foreign buyers actively absorbing the supply due to FTSE rebalancing.

Leading contributors to the index's rise included Habib Bank (+6.84%), Meezan Bank (+4.61%), and MCB Bank (+4.15%). However, Oil and Gas Development Company (-3.13%), Hub Power (-1.71%), and Pakistan Petroleum (-2.65%) weighed down the index.

JS Global analyst Mubashir Anis Naviwala noted that the index achieved a record high of 82,074, closing the day with a gain of 615 points. Sectors such as banking, exploration and production, power, and fertiliser attracted strong investor interest amid the FTSE reshuffle.

Overall trading volume rose to 482.3 million shares, with a total value of Rs30.2 billion. Out of 453 traded companies, 195 closed higher, 196 declined, and 62 remained unchanged.

Notably, foreign investors sold shares worth Rs4.2 billion during the session, as per data from the National Clearing Company of Pakistan Limited (NCCPL).