PSX rallies over 600 points, closes at all-time high

Published March 27, 2024
This image shows activity on the Pakistan Stock Exchange on Wednesday. — Screenshot via PSX data portal
This image shows activity on the Pakistan Stock Exchange on Wednesday. — Screenshot via PSX data portal

Bulls dominated the trading floor of the Pakistan Stock Exchange (PSX) on Wednesday as shares gained over 600 points, with analysts attributing the gains to “good progress” made regarding the privatisation of Pakistan International Airlines (PIA).

On Tuesday, the federal cabinet approved the board of PIA Holding Company, with former State Bank governor Tariq Bajwa being appointed as its chairman.

The move was hailed as a significant development in the national carrier’s privatisation process as its liabilities and assets will be transferred to the holding company, which will be registered with the Securities and Exchange Commission of Pakistan. The board will include seven independent directors and four government officials.

Today, at 11:14am, the benchmark KSE-100 index gained 520.58 points from the previous close of 65,906.27. By 1:43pm, it advanced by a further 143 points, cumulatively gaining 663.71 points to reach 66,529.98 points, or 1.01 per cent ahead.

Finally, the index closed at 66,547.78 points, up by 641.51 or 0.97pc, from the previous close.

It should be noted that that the index crossed the all-time high record of 66,426.78 points previously set on December 12.

Mohammed Sohail, chief executive of Topline Securities, said “good progress” made regarding the privatisation of the national carrier and a “likely new deal with the International Monetary Fund (IMF)” was helping market sentiment.

He highlighted that the benchmark index was once again closing in on the all-time high number of 66,427 points, which was seen in December.

Moreover, he said that foreign fund buying — as shown by National Clearing Company of Pakistan Limited (NCCPL) data — also supported share prices “which are trading at an attractive price-to-earning ratio of less than four”.

He said that currently the country’s market was the best performing market with the highest gains in last six months.

Shahab Farooq, director of research at Next Capital Limited, attributed the rally to “positive developments” on the macroeconomic front such as the progression of PIA’s privatisation and moving ahead with the new IMF deal.

“The finance minister’s statement regarding interest rates and foreign buying are [also] fueling positive sentiments in the market,” he said.

In an interview earlier this month, the finance minister had talked about the need for getting “our house in order by reducing government expenditure”. He had also expressed the hope that the credit rating of the country would improve, and macroeconomic stability would follow.

Yousuf M. Farooq, director of research at Chase Securities, said, “The relative calm on the political front, coupled with the finance minister’s rational interview on a media channel, alongside institutional and foreign buying this morning, has kept investors upbeat.”

However, he warned that participants were getting increasingly concerned about the record high interest rate “which could potentially lead to more defaults and non-performing loans (NPLs), particularly in the textile sector where higher energy costs compared to peers are making textile firms uncompetitive”.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Race against time
Updated 09 Feb, 2025

Race against time

While some bright spots emerged at Breathe Pakistan moot, we must streamline our climate governance.
Open door
09 Feb, 2025

Open door

THE door is still open for talks, National Assembly Speaker Ayaz Sadiq has reminded the PTI. What matters, however,...
Football suspension
09 Feb, 2025

Football suspension

ONCE again, Pakistan has been ousted from the global football family. FIFA recently suspended the Pakistan Football...
A year later
Updated 08 Feb, 2025

A year later

A war of egos has been fought between a handful of individuals at the cost of the well-being of millions of ordinary Pakistanis.
Wheat decision
08 Feb, 2025

Wheat decision

THE federal decision to stop setting the minimum support price for wheat and cease the staple’s procurement...
Dhanmondi attack
08 Feb, 2025

Dhanmondi attack

HISTORY has shown that unless states deliver development and equal rights to all, disenfranchised people can target...