KARACHI: The stock market maintained a bullish trend in the outgoing week due to aggressive value-hunting, propelling the KSE 100-share index to an all-time high, closing above 67,000, on persistent optimism about economic stability, PIA privatisation and expected inflows from the IMF next month after reaching a staff-level agreement.

AKD Securities Ltd said the first four sessions cumulatively added around 2,000 points following a slight profit-taking session noted on the last day of the week.

Positivity loomed over the successful last review of IMF’s Stand-By Arrangement (SBA) and the government’s steps and commitment to tax-broadening reforms and privatisation of loss-making state-owned entities. In this regard, the federal cabinet gave its approval to the 11-member board of directors of the PIA Holding Company, paving the way for speedy privatisation of the national flag carrier.

Furthermore, a new tax regime was evolved for retailers and wholesalers, piloted initially in major cities, to broaden the tax base. While similar taxation measures have failed previously, if successful this time, they could set the stepping stone for tax base broadening.

Additionally, with FTSE Russell retaining Pakistan in the secondary emerging market for the next six months, optimism was further boosted.

However, in its statement, the leading global index provider said Pakistan would remain on the Watch List for potential demotion from secondary emerging to frontier market status. It added that over the last few years, Pakistan has experienced a steady decrease in its index weight within FTSE Russell global benchmarks.

Moreover, the inflation outlook also presented a positive stance, with March CPI-based inflation expected at 20.6pc year-on-year, turning the real interest rate into positive territory after 38 months.

Arif Habib Ltd said the market witnessed profit-taking by institutional investors in the last session after the National Accounts Committee (NAC) reported GDP growth slowed to 1 per cent in 2QFY24 compared to 2.2pc in the same quarter last year. This meagre growth was mainly supported by the agriculture sector, which witnessed an expansion of 5pc.

The State Bank of Pakistan (SBP) reported the repatriation of profits and dividends on foreign investment swelled by 237pc or $534 million to $759m in 8MFY24 compared to $225m in the same period last year.

Moreover, the SBP’s reserves recorded a meagre rise of $4m to $8.02bn in the week ending March 22. The rupee added 19 paise to Rs277.95 against the dollar week on week.

As a result, the KSE 100-share index closed at 67,005 points after adding 1,853 points or 2.84pc week-on-week.

The market is expected to remain positive in the upcoming week with the start of the result season. In addition, any developments on privatisation and the Extended Fund Facility front would further boost market sentiment.

Published in Dawn, March 31st, 2024