KARACHI: The Pakistan Stock Exchange (PSX) continued its record-setting streak, driven by solid expectations of another significant reduction in interest rates. This optimism was reinforced by a drop in inflation to a six-and-a-half-year low in November, raising hopes for substantial investment inflows into equities for higher returns. Consequently, the benchmark index surged, crossing the 103,000-point milestone on Monday.
Robust economic data also bolstered investor confidence as the trade deficit narrowed 19pc year-on-year to $1.589bn. Imports decreased by 3pc to $4.4bn, while exports increased by 9pc to $2.8bn. In 5MFY25, the trade deficit clocked in at $8.7bn, down 7pc.
The daily traded volume increased by 70pc to 1.554 billion shares, the highest since Dec 18, 2023, when 1.89bn shares were traded.
The index rallied 2,029.15 to hit an intraday high of 103,386.47. However, it settled at 103,274.95, registering a gain of 1,917.63 points.
Topline Securities Ltd attributed this positivity to Consumer Price Index-based inflation, falling to 4.9pc in November against 7.2pc in October. Record participation was observed, as today’s traded value of Rs47bn was highest after May 2017.
Ahsan Mehanti of Arif Habib Corporation said stocks showed record bullish activity amid upbeat CPI data, which may further soften monetary policy in the upcoming review.
Bull run in global equities, rising exports, and surging SBP foreign exchange reserves were other positive factors that supported the northward journey at PSX.
The top contributors to the index’s rise were Engro Corporation, Fauji Fertiliser, Meezan Bank, and Fauji Cement, as they added 617 points. Investor interest was observed in the cement sector as it gained 4.7pc day-on-day on the expectation of higher despatches for November, where declining interest rates have stimulated the sector.
Stocks contributing significantly to the traded volume included WorldCall Telecom (213.51m shares), Cnergyico PK (196.90m shares), Fauji Foods (68.32m shares), K-Electric (66.21m shares) and Sui Southern Gas Company (65.26m shares).
The shares registering the most significant increases in their share prices in absolute terms were Unilever Foods (Rs270.00), Service Industries (Rs134.94), Nestle Pakistan (Rs62.20), Hoechst Pakistan (Rs54.01) and PIA Holding Ltd [B] (Rs52.23).
The companies registering significant decreases in their share prices in absolute terms were Ismail Industries (Rs38.28), Pakistan Tobacco (Rs20.23), Siemens Pakistan (Rs19.34), Haleon Pakistan (Rs17.34) and Philip Morris (Rs8.70).
Foreign remained net sellers as they offloaded shares worth $2.77m, while mutual funds bought shares worth $10.10m.
Published in Dawn, December 3rd, 2024
