- The PSX opened on a positive note, extending its 26th revision-driven rally.
- Investors look to dividend-paying stocks as corporate results stream in.
- Sentiments boosted after the International Monetary Fund forecast Pakistan’s GDP to grow by 3.2%
Stocks on Wednesday breached the psychological barrier of 87,000 points to touch a new historic high, mainly driven by optimism that Pakistan’s economy is on the right track supported by strong data and IMF forecasts for fiscal year 2024-25.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) rose to 87,128.04 points in early trade, up from the previous close of 86,466 points.
Heavy buying from automobile assemblers, cement and chemical companies, commercial banks, oil and gas exploration companies, oil marketing companies (OMCs) and refiners saw an upward trend in blue chips.
The Q1 (Q1FY2024) corporate earnings season is underway with expectations of payout/dividend cuts and optimistic investors entering the right sectors.
The capital market is riding a bullish wave that began with the passage of the 26th Amendment with heavyweight indices, which are expected to provide attractive payments, and remain major drivers during the earnings season amid hopes for stability, especially after improving economic data.
The government, which had been engaged in intense lobbying to amend the constitution through Parliament for weeks, finally succeeded in restricting the powers of the supreme judiciary in appointing the chief justice of the Supreme Court.
The constitutional changes were approved in an extraordinary session of Parliament that took place on Sunday, a public holiday, and lasted through the night, ending near dawn on Monday.
With the International Monetary Fund (IMF) forecasting a GDP growth rate of 3.2% for fiscal year 2025, amid declining inflationary pressures, the Pakistani economy is expected to witness a strong boost. This growth is expected to have a positive, albeit slight, impact on the unemployment rate.
Analysts say the market is drawing strength from September’s current account surplus of $119 million and FDI of $771 million in Q25, up 48% year-on-year.
The surplus is the largest since April 2024, compared to a surplus of $29 million in August and a deficit of $218 million in September 2023, according to State Bank of Pakistan data released on Monday.