KSE-100 Index Surpasses 110,000 Points Amid Investor Optimism
Islamabad, The Gulf Observer: The Pakistan Stock Exchange (PSX) achieved a historic milestone as the KSE-100 Index crossed the 110,000-point mark for the first time, buoyed by investor confidence in the country’s improving economic conditions and easing inflation.
The benchmark index closed at 110,264.51, reflecting a gain of 1,210.56 points (1.11%) after recovering from an intraday low of 107,902.66.
Market Volatility and Government Measures
The session began with a sharp decline of over 1,000 points amid concerns over potential government tax measures targeting banks’ profits. This sentiment was sparked by the establishment of a seven-member committee, chaired by Deputy Prime Minister Ishaq Dar, to review taxation on banks’ investments in government securities and recommend reforms to boost private-sector lending.
“Banks, which led the recent rally, saw declines of over 4% as news of the committee surfaced,” said Muhammad Saad Ali, Director of Research at Intermarket Securities Ltd.
Global and Domestic Catalysts
Macroeconomic developments played a pivotal role in the rebound:
- Inflation dropped to 4.9% in November, the lowest since April 2018.
- Saudi Arabia extended a $3 billion deposit for another year, bolstering foreign reserves.
- Trade agreements worth $560 million and a 25-month high in petroleum sales signaled increasing economic activity.
Additionally, the government raised Rs353 billion through an Ijarah Sukuk auction, boosting market liquidity.
However, global factors, including a selloff in global equities and concerns over potential IMF target slippages, weighed on investor sentiment.
Optimism from Leadership
Prime Minister Shehbaz Sharif celebrated the milestone, attributing economic progress to government stabilization efforts. He highlighted:
- Weekly inflation falling to 3.57%, the lowest in six years.
- Rising remittances and foreign investment.
- Strengthened diplomatic and trade ties.
Finance Minister Muhammad Aurangzeb shared an optimistic outlook, projecting remittances to exceed $35 billion by FY 2024-25 and outlining reforms to address inefficiencies and encourage local production.
Analysts Eye Future Growth
As the State Bank of Pakistan’s monetary policy meeting approaches on December 16, expectations of a rate cut and continued reforms remain high. Analysts are confident in the market’s long-term prospects, citing easing inflation, robust macroeconomic indicators, and an improving investment climate.
The latest achievements mark a significant step in Pakistan’s journey toward sustained economic growth and market resilience.
