Stocks on Friday scaled a new peak after testing the 95,000 mark, drawing strength from robust forex numbers and eased concerns over a potential International Monetary Fund (IMF)-driven mini-budget involving additional taxation measures.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index jumped to a record high of 94,763.64 points, up 571.75 points, from the previous close of 94,191.89 points, after flirting with an intraday high of 95,278.26 points.
The market’s upward momentum underscores a growing wave of investor confidence fueled by encouraging economic indicators.
Reacting to the bull run, Ahsan Mehanti, Managing Director & CEO at Arif Habib Commodities, said stocks reached a new all-time high amid receding fears over mini-budget and Islamabad High Court (IHC) relief on banking sector tax levies.
“Falling bank lending rates and rupee stability contributed to the ongoing rally at the capital market,” Mehanti added.
Central bank-held foreign exchange reserves reached a more than two-year high of $11.26 billion as of November 8, while the rupee also rose for the second straight day on Thursday as exporters’ dollar sales and remittances exceeded importers’ demand.
Reports suggest the IMF has raised no concerns about Pakistan meeting its revenue collection targets, easing fears of a mini-budget or new taxation measures. This has bolstered investor sentiment and increased trading activity across sectors.
The mission, led by its mission chief Nathan Porter, is visiting Pakistan to hash out recent developments and the Extended Fund Facility (EFF) programme performance to date.
After meetings with Pakistani authorities, the IMF staff has reportedly given a thumbs-up to an increase in the tax-to-GDP ratio by nearly 1.5 percentage points — a significant achievement by the Federal Bureau of Revenue (FBR).
Topline Securities in its market commentary said the banking sector got a boost following the IHC decision to temporarily bar the government from collecting an additional tax of up to 15% from banks on private sector borrowing below the target.
In terms of traded value, Pakistan State Oil (Rs2.86 billion), Attock Refinery Limited (Rs2.24 billion), TRG Pakistan (Rs1.76 billion), Hub Power Company (Rs1.3 billion), and Oil and Gas Development Company (Rs1.29 billion) dominated the trading activity at the PSX, the report added.
It noted that major contributors to the index were United Bank Limited, Habib Bank Limited, and Meezan Bank Limited, which collectively added 301 points to the benchmark.
In the pharmaceutical sector, The Searle Company Limited was the most actively traded stock, with 12.6 million shares worth Rs1.08 billion changing hands.
Decent participation was observed in the market, with traded volumes standing at 892 million shares and the traded value amounting to Rs30.8 billion. WorldCall Telecom Limited emerged as the volume leader with 78 million shares traded.