The Pakistan Stock Exchange (PSX) witnessed a robust trading session on Friday, with the KSE-100 index climbing 427.45 points, or 0.59%, to close at 73,085.5 points. This surge pushed the index past the 73,000-point threshold for the first time, driven by optimistic forecasts of a quicker-than-anticipated drop in inflation.
Mohammed Sohail, CEO of Topline Securities, attributed the milestone to investor expectations of rapidly falling inflation rates. “Investors have been actively purchasing shares from sectors likely to benefit from anticipated lower interest rates,” he explained.
Yousuf M. Farooq, Director of Research at Chase Securities, noted that traders are predicting inflation to settle around 15% for May, with a potential reduction in interest rates in the upcoming financial year. This expectation spurred interest, particularly in cyclical stocks during the trading session.
Raza Jafri, CEO of EFG Hermes Pakistan, echoed similar sentiments, pointing out that monetary easing expectations are gaining momentum. He remarked, “Real interest rates are now around +5%, and the external account shows signs of stability, which has increased buying in traditionally underperforming, leveraged sectors like cement, attracting both local and foreign investors.”
The positive trend followed a brief recovery after a three-day downturn, where selective buying helped the KSE-100 index close in positive territory. Ahsan Mehanti of Arif Habib Corporation linked the mild recovery to several key factors:
- The World Bank’s reaffirmed commitment to support Pakistan’s structural reforms, discussions on privatizing struggling state-owned enterprises,
- Anticipations surrounding upcoming loan negotiations with the IMF,
- The potential implications of the Saudi crown prince’s visit to finalize investment agreements under the Special Investment Facilitation Council.
