As shares crossed the 88,000 mark on Thursday, bulls continued their stampede on the Pakistan Stock Exchange (PSX) trade floor.
At 10:56 a.m., the benchmark KSE-100 index increased by 851.11 points, or 0.98%, to 88,045.64 points from its previous close of 87,194.53 points. It increased further by 1:17 p.m., gaining 1,189.31 points, or 1.36 percentage points overall. In the end, it closed at 88,945.98 points, an increase of 1751.45 points, or 2.01 percentage points, from the previous close.
Topline Securities CEO Mohammed Sohail said that the bull run was caused by locals buying a lot of bonds because they thought the monetary policy rate would be cut a lot in November.
Due to lower inflation, a smaller current account deficit, and increased remittances, the majority of analysts anticipate that the State Bank of Pakistan (SBP) will reduce its policy rate by 200 basis points at its upcoming meeting on November 4. This would be the fourth cut in a row since June.
He stated, “Aggressive institutional buying led to another high in Pakistan market amid hope of big rate cuts in monetary policy meetings in November and December.”
He mentioned that the cash and futures markets at the stock exchange saw a “record volume” of Rs53 billion, or 190 million dollars, which indicated that investors’ confidence was rising.
According to Yousuf M. Farooq, Chase Securities director of research, “We are in a bull market and market participation is increasing.”
He mentioned that for the past two days, “volumes for the ready and futures counters combined” have exceeded Rs40 billion.
He added, “We expect this to continue as fund conversions have started to flow towards equities.”
“With political risks easing and the approval of a $3 billion loan facility from the Islamic Trade Financing Corporation [ITFC], investor sentiment has turned bullish on equities,” stated Awais Ashraf, director of research at AKD Securities.
The finance ministry confirmed in a post on X that Finance Minister Muhammed Aurangzeb met with the ITFC delegation in Washington to thank them for their support of $3 billion in commodity financing over the next three years.
Ashraf emphasized that investors also anticipated “further aggressive monetary easing in the upcoming policy announcement” due to the fact that real interest rates remained above 10 percentage points despite a total of 4.5 percentage points of key policy rate cuts since June of this year.
He added, “It is anticipated that stocks that stand to benefit from monetary easing and ongoing structural reforms will outperform others.”
The average traded volume of the stock market has increased by 73.36 percent annually.
Yesterday, shares had risen due to expectations that the monetary policy announcement on November 4 would include a rate cut.
