- Circulation remains strong, with 587 million notes in circulation.
- Systems, Lucky, Cherat, Hubco, Engro, are among the top performers.
- Analysts say Qatar and Saudi Arabia’s investment pledges have boosted sentiment.
Stocks rose on Monday to a new record high ahead of a pivotal central bank meeting, buoyed by investor optimism about a possible interest rate cut and a favorable economic outlook showing strength across major indexes.
The benchmark KSE-100 stock index of the Pakistan Stock Exchange (PSX) rose 1,078.15 points or 1.19% to close at 91,938 after hitting an intraday high of 92,159 points.
Major contributors to the rise include Systems Limited, Lucky Cement Limited, Cherat Cement Company Limited, Hub Power Company Limited and Engro Corporation Limited, which collectively added 611 points to the index.
Trading activity remained strong, with 587 million shares traded at a total value of Rs 29 billion. Power Cement Limited led the trading volume, with an impressive 56 million shares changing hands.
talking to Geo.tvEhsan Mehanti, Senior Analyst at Arif Habib, said that stocks hit all-time highs as investors were anticipating a major interest rate cut following a 3.4% drop in interest rates in NSS (National Saving Schemes) rates due to CPI (Consumer Price). In October by 7.2%. Inflation index.
“Investment pledges worth $3 billion from Qatar, $2.8 billion from Saudi Arabia, and a stabilizing rupee also fueled record bullish activity on the PSX,” Mahanti added.
Last week, Information Minister Ataullah Tarar said that Qatar will invest $3 billion in various sectors in Pakistan, including trade, investment, culture and others, after the successful visit of Prime Minister Shehbaz Sharif.
Investors are awaiting the State Bank of Pakistan’s Monetary Policy Committee (MPC) meeting later today, anticipating a significant interest rate cut of 200-300 basis points, which may boost investor sentiment.
Saad Ali, Research Director at Intermarket Securities Ltd, said: Geo.tvThe market is currently witnessing a broad rally ahead of today’s Monetary Policy Committee meeting, with a cut of up to 200 basis points expected.
“The market witnessed a broad rally ahead of today’s MPC meeting, with the market anticipating a cut of up to 200 basis points. Investors are ignoring such negative news as stalled PIA privatization, delay in Panda bond launch, and IMF disallowance,” Ali said. “Mitigating tax targets.”
Samiullah Tariq, head of research at Pakistan Kuwait Investment Company, echoed Saad’s sentiments, saying that upbeat broader economic conditions also contributed to the market’s rise.
The central bank has cut its benchmark interest rate to 17.5% from an all-time high of 22% in three consecutive policy meetings since June, after last cutting it by 200 basis points in September.
Later in the day, the Fed cut its key interest rate by 250 basis points to 15%, at least 0.5% more than market expectations, marking the fourth straight cut.
The Bank of England’s Monetary Policy Committee noted that “inflation fell faster than expected and reached near the medium-term target range in October,” adding that “the tight monetary stance continues to play an important role in maintaining the downward trend.” . inflation trend.”
The Monetary Policy Committee, which met on Monday to decide the rate, attributed the decline in inflation to the sharp decline in food inflation, favorable global oil prices and the absence of expected adjustments in gas tariffs and petroleum development levy (PDL) rates in recent months.
The statistics office says CPI inflation in the South Asian country averaged 8.7% in the current fiscal year, which began in July. The International Monetary Fund expects inflation to average 9.5% for the year ending in June.
While the economy has gradually begun to recover, and inflation has fallen sharply from a multi-decade high of around 40% in May 2023, analysts say further interest rate cuts are needed to boost growth.
The inflation rate in October was 7.2%, slightly above the government’s expectations of between 6% and 7%. The Ministry of Finance expects inflation to slow further to 5.5% to 6.5% in November.