Bull run at PSX as IMF nod adds to investor confidence

The Pakistan Stock Exchange has recorded a respectable bull run as the benchmark index of the exchange, the KSE-100, posted a 1300-point improvement at its intraday trading peak. As per credible reports, the International Monetary Fund’s (IMF) staff-level agreement, set to disburse $2.3 billion to Pakistan, has been the reason for the surge in market optimism.

The KSE-100 index hit an intraday high of 118,220.88 points at approximately 9:20 AM, after which profit-taking took hold of the market, causing the market to decline slightly but still close out at a respectable 117,772.31 points.

For reference, the KSE-100 closed at 116,633.16 points on Tuesday, after which the index recorded a growth of 0.98 percent during trading hours on Wednesday, allowing for a 1,139.15-point rise. The market displayed a significant slowdown around 10:51 AM as the KSE-100 hit its intraday trading low of 117,178.23 points before recording a swift recovery to its current position.

Every single index remained in the green, with the All-share index (ALLSHR) experiencing a 1.05 percent growth rate, which translates into a 761.71 point gain for the index. Unlike the KSE-100, which tracks the performance of the 100 largest and most liquid companies, the ALLSHR index records the performance of all publicly listed companies on the PSX.

The PSX has displayed great average returns for its investors over the past year and with the staff-level agreement reaching its conclusion, regarding the second disbursement of the Extended Fund Facility (EFF) program, indexes on the exchange continue to climb.

Data from the PSX reveals that the ALLSHR index has shot up by a staggering 67.77 percent over just one year, with the KSE-100 recording an even greater rise of 78.70 percent over one year – a growth rate that many would categorize as nothing short of meteoric. Moreover, the Year-to-Date (YTD) change for the ALLSHR and KSE-100 index recorded improvements, sitting at 1.55 percent and 2.30 percent, respectively.

A vast array of companies witnessed a rise in share prices. However, reports suggest that a large volume of buying was seen in the automobile, banking, cement, chemicals, oil and gas exploration and power generation sectors. Mughal Iron Steel Industries Limited (MUGHALR2) and Security Investment Bank Limited (SIBL) won big during trading hours – to the tune of growth rates that sat at 49.75 percent (MUGHALR2) and 11.12 percent (SIBL). 

However, not every publicly listed stock witnessed an improvement, as many companies have seen sharp declines. Of these declining companies, the one that fared the worst during intraday trading was Paramount Spinning Mills Limited (PASM), which posted a 12.03 percent decline in its position.

The trading volume of regular stocks stood at an impressive 356,729,109 shares, translating into a total value of approximately 37.5 billion rupees. According to reports, the government has approval for the first review of the EFF program and requires only the IMF’s executive board’s approval. Some believe that the PSX will notice further improvements upon final approval by the IMF, which will unlock $2 billion for cash-strapped Pakistan.