The disbursement of $2 billion in cash by the Kingdom of Saudi Arabia into the State Bank of Pakistan on Tuesday contributed to a positive trading session on the Pakistan Stock Exchange (PSX), as KSE-100 index achieved a 52-week high index of 45,160.
Another factor in today’s PSX increase was Fitch Ratings’ Monday upgrading of Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from “CCC-” to “CCC”.
The new record is tied with the previous high point, which was reached on April 28, 2022. The market has performed the best in the world this month thanks to today’s rally.
Pakistan’s stock market breaches its 52-week high ????????????????
Its the best performing market in the world this month ???????????? pic.twitter.com/LUkD5USaHy
— Faseeh Mangi (@FaseehMangi) July 11, 2023
Economic Analyst on Today’s PSX Surge
Economic analyst A H H Soomro said, “The index is now getting clarity over whatever it wished for; IMF package until new govt, painful fiscal and monetary measures, external financing from bilateral and multilateral resources, and material improvement in credit risk compared to the new default scenario.
The initial stability in Rupee and outlook is leading to rerating of the index. KSE-100 still should move towards 4.5-5X P/E after which the path will be determined by much-needed structural reforms.”
The benchmark KSE-100 index increased by up to 574 points, or 1.5 percent, after soaring to a high of 45,160 points after the market opened for business at 44,691.46 points.
The benchmark KSE-100 index increased by roughly 510 points during intraday trading as the market skyrocketed. At 12:50 PM, the index increased 556 points from its previous close of 44,585 points to 45,140 points.
At 13:45, the stock market had risen by 478 points to reach a position of 45,062. The top three contributors were commercial banks (102.5 points), cement (102) and oil & gas exploration (57.35 points).
The IMF Executive Board’s approval in tomorrow’s agenda meeting is anticipated to lead to impending inflows that would raise the PSX even further.
It is commonly anticipated that the confidence among investors and market participants will also help the exchange rate.
To read our blog on “PSX stocks increase by 1000 points due to IMF bailout hope,” click here.