KARACHI: Amid ongoing economic optimism, the stock market maintained a robust outlook, extending a surprise record-breaking spree in the last days of Ram­azan by scaling a new peak in the outgoing short week.

Arif Habib Ltd (AHL) said the market continued its positive momentum throughout the four-day trading week, hitting an all-time high above the 68,000 level. The market sentiment was fuelled by a sharp deceleration in inflation and rising expectations of an interest rate reversal.

Moreover, cut-off yields on treasury bills remained unchanged in the three- and 12-month tenors while increasing by 101 basis points in the six-month tenor. In addition, the petroleum sales witnessed a jump of 4pc year-on-year and 3pc month-on-month.

The rupee remained stable at Rs277.93 against the dollar, adding just two paise week-on-week.

As a result, the KSE 100-share index closed at a record 68,417 points after adding 1,412 points or 2.11pc week-on-week.

AKD Securities Ltd said the bullish momentum stemmed from easing inflation to 20.68pc in March, which turned the real interest rate positive for the first time in 38 months. Furthermore, foreign investors and institutions injected additional liquidity through buying, supporting the market’s bull run.

Foreign buying continued during the outgoing week, clocking in at $3.9 million compared to a net buy of $3.6m last week. Major buying was witnessed in commercial banks ($2m) and fertiliser ($0.9m). On the local front, insurance companies reported selling ($5.6m), followed by broker proprietary ($1.7m).

However, the trade deficit widened by over 56pc to $2.17bn in March. With Eidul Fitr approaching, remittances are expected to increase, which will help control the current account balance.

In addition, the Federal Board of Revenue missed its monthly tax collection target for the third consecutive month, although the 9MFY24 numbers were within the target.

The World Bank estimated the country’s GDP growth target at 1.8pc for the current fiscal year and below 3pc for the following two years, resulting in an overall combined GDP growth for three years that remains lower than the population growth rate.

Reports suggest that the Kingdom of Saudi Arabia is interested in purchasing shares of OGDC and PPL, in addition to an expected investment of $1bn in the Reko Diq project.

The average trading volume eased 7pc to 307m shares and the average value traded settled at $42m week-on-week.

Meanwhile, other major news included sugar millers seeking permission to export ‘expensively produced’ sugar, cement despatches rising 3.85pc in March, and exports leapt 38.02pc. The Competition Commission of Pakistan issued notices to urea makers.

AKD Securities Ltd said the market is expected to return its focus to negotiations with the IMF regarding the fresh Extended Fund Facility, the upcoming monetary policy committee meeting, and the corporate results season following the Eid holidays.

Despite the market reaching its highest levels, the forward price-to-earnings ratio remains below 4x, instilling positivity regarding the market’s fundamentals.

Published in Dawn, April 6th, 2024