KARACHI: Contrary to the usual lethargy associated with Ramazan, the Pakistan Stock Exchange (PSX) on Wednesday set history by hitting an all-time high near 118,000 as investors continued value-hunting in the energy sector amid progress on resolution of circular debt.

Despite many depressants, chiefly the deteriorating security situation, the benchmark KSE 100 index triumphed to an all-time high, closing at 117,974, up 973 points or 0.83pc day-on-day. The previous record of 117,586.98 was on Jan 3.

The fifth straight bullish session in Ramazan was a new trend for the PSX, which usually sees low volume and lacklustre activities in the holy month.

In recent weeks, the country faced a new wave of terrorist attacks, mai­nly in Khyber Pakhtun­khwa and Balochistan, which is shaking foreign investors’ confidence and well reflected in the 45pc year-on-year plunge in Foreign Direct Investment (FDI) to $95 million in February.

The major economic in­­dicators showed improvement, but the country is still not out of wood, as the Large-Scale Manufac­tu­ring (LSM) sector remai­ned negative in the first seven months of FY25 despite a sharp reduction in the State Bank of Pakistan’s policy rate to 12pc from an unprecedented 22pc in June 2024.

However, the business community consistently urging the government to bring down the interest rate to single digits to revive economic activities as the inflation slowed to 1.5pc in February. However, the central bank disappointed the business community by delivering a surprise status quo in its March 10 meeting, citing high core inflation.

After staying stable around Rs277-278 to a US dollar for over a year, the rupee turned weaker due to falling SBP reserves amid high-profit repatriation by multinationals and widening trade balance, depreciating the local currency to fall through the Rs281 in the interbank market and 282 in the open market. This weakness is despite a 39pc surge in remittances in the first eight months of FY25.

The first review under the $7bn Extended Fund Facility concluded positively after the IMF termed Pakistan’s progress strong. However, no staff-level agreement suggested a delay in releasing the $1.1bn second tranche until May.

Topline Securities Ltd said the PSX continued its upward momentum, fuelled by strong buying activity from local institutions, the index hit an intraday high at 118,244 points.

The rally was primarily driven by Hub Power, Mari Energies, Engro Holdings, Systems Ltd, and Pakistan Petroleum, contributing 551 points to the index. On the other hand, Fauji Fertiliser, Engro Fertiliser, and Pakistan Oilfield exerted downward pressure, pulling the index down by 54 points.

Ahsan Mehanti of Arif Habib Corporation said stocks closed bullish amid speculations over a resolution to Rs1.25tr power sector circular debt after reports of IMF’s conditional readiness to app­r­ove the government circular debt management plan raising Rs1.25tr through commercial banks.

He added that higher global crude oil prices and expectations of a cut in industrial power tariff played a catalyst role in the bullish close at PSX.

Ali Najib, Head of Sales at Insight Securities, said the progress on IMF programme, anticipation of further drawdown in CPI-based inflation to 1-1.25pc in March were the key catalysts for the continuous strong momentum despite the low volumes.

Trading activity was relatively better as the trading volume rose 21.07pc to 544.2 million shares while the traded value increased 10.73pc to Rs32.31bn day-on-day.

Published in Dawn, March 20th, 2025