PSX Surges Beyond 80,000 Points Amid Investor Optimism
KARACHI: The Pakistan Stock Exchange (PSX) saw a significant gain on Wednesday, with the benchmark KSE-100 index rising over 700 points. This surge pushed the KSE-100 index beyond the 80,000 mark, driven by heightened investor interest in state-owned enterprises (SOEs).
The KSE-100 index reached 80,292.59 points during intraday trading, up by 739.71 points or 0.93% from the previous close of 79,552.89 points.
Investor Sentiment and Key Drivers
EFG Hermes Pakistan’s CEO, Raza Jafri, attributed the gain to a burst of buying in SOEs such as the National Bank of Pakistan (NBP) and Oil and Gas Development Company (OGDC). He noted that this interest was fueled by press reports indicating a push on privatization, strategic stake sales, and addressing legacy issues.
“This comes within increasing hopes of sizeable interest rate cuts in the second half of 2024 and timely entry into an International Monetary Fund (IMF) programme,” Jafri added.
Finance Minister Muhammad Aurangzeb stated that the government’s privatization plan spans two to three years and will be executed as part of the broader economic strategy. The National Assembly passed the budget for FY25 last week, reinforcing this commitment.
Minister for Privatization, Aleem Khan, highlighted the federal government’s intent to privatize around 24 SOEs in the coming years, with Pakistan International Airlines (PIA) expected to be the first enterprise to undergo privatization.
Market Optimism and Macroeconomic Factors
Intermarket Securities Director of Research, Saad Ali, cited optimism regarding the IMF programme and the continuation of macroeconomic recovery post-budget approval as significant reasons for the market surge.
“The market continues to re-rate from still low valuations and the prospect of lower interest rates in the future,” Ali explained.
A day prior, stocks closed significantly higher at 79,552.89 points amid expectations of better earnings in the half-year results by SOEs in the oil sector.
Economic Stability and Investor Confidence
Alpha Beta Core CEO, Khurram Schehzad, noted that the budget’s passage, aligning with most of the IMF’s conditions for a new, larger, and longer programme, has boosted investor confidence in economic reforms and the stability of the economy.
