Stocks rise 671 points on rupee appreciation, lower trade deficit

Published August 5, 2022
<p>A snapshot of trading activity at the Pakistan Stock Exchange. — Photo via PSX website</p>

A snapshot of trading activity at the Pakistan Stock Exchange. — Photo via PSX website

Stocks gained over 650 points on Friday, with analysts attributing the bullish momentum to the rupee's continued appreciation as well as a lower-than-expected trade deficit in July.

The benchmark KSE-100 index gained 670.87 points, or 1.62 per cent, to close at 42,096.24 points, according to the Pakistan Stock Exchange (PSX) website.

The market saw an intraday high of 42,168.08 points around 3:40pm.

Ahsan Mehanti of Arif Habib Corporation said the shares market rose because of the rupee's appreciation and easing trade deficit.

He added that reports about the army chief meeting Saudi Arabia and United Arab Emirates officials to discuss issues related to the International Monetary Fund (IMF) and speculations over the release of the tranche acted as a catalyst.

AKY Securities Chief Executive Officer Amin Yousuf said the cement sector performed well due to falling coal prices in the international market.

"Besides this, the rupee is appreciating while oil prices are going down. It seems the situation will improve in the coming days."

Yousuf said the trade deficit was not as large as it was expected to be — a development to which the market had reacted positively and investors were now buying stocks.

He noted that the meeting of the State Bank's Monetary Policy Committee was coming up on Aug 22 which could affect the market. He added, however, that most analysts expected the current interest rate would be maintained.

"The upwards momentum is strong. It seems it will continue after the holidays," Yousuf commented.

Data released by the Pakistan Bureau of Statistics earlier this week showed that Pakistan’s trade deficit declined by 18.33pc to $2.64 billion in July from $3.23bn over the corresponding month of last year. The month-on-month decline in trade deficit was recorded at 46.76pc.

In FY22, the trade deficit reached an all-time high of $48.66bn from $30.96bn a year ago, indicating an increase of 57pc on the back of higher-than-expected imports.

Separately, the rupee has been on an upwards trend since July 29.

Opinion

Editorial

Beyond the pale
Updated 09 Aug, 2022

Beyond the pale

When such ugliness is unleashed, everyone at some point suffers the fallout.
Burying Gaza
09 Aug, 2022

Burying Gaza

IT is a sad commentary on the politics of the Middle East that even its most tragic human stories get defaced and...
Celebrate the athlete
09 Aug, 2022

Celebrate the athlete

TALK about delivering on your promise: javelin thrower Arshad Nadeem did that in the grandest style at the...
An unseemly dispute
08 Aug, 2022

An unseemly dispute

THERE is clarity, but perhaps not of the kind that Chief Justice of Pakistan Umar Ata Bandial hoped to achieve when...
Unfair on taxpayers
Updated 08 Aug, 2022

Unfair on taxpayers

Unfair move has drawn valid criticism as it coincides with drastic increase in income tax on salaried people and corporates.
Polio nightmare
08 Aug, 2022

Polio nightmare

AS if the resurgence of polio in southern KP were not enough, officials and international monitoring bodies must now...