Bulls dominate trading as PSX shares rise by 800 points in intraday session
The Pakistan Stock Exchange (PSX) saw a surge of 800 points in intraday trading on Monday, with the benchmark KSE-100 index rising by 817.68 points, or 0.71%, reaching 116,089.76 points, up from the previous close of 115,272.08 points at 2:29 pm.
Mohammed Sohail, CEO of Topline Securities, credited the upward movement to “signs of political stability” and expectations of an additional rate cut, which helped boost investor sentiment.
Awais Ashraf, Director of Research at AKD Securities, noted that the resolution of political uncertainty, following a verdict in a corruption case, had positively impacted investor confidence.
Ashraf further stated that investors were optimistic about the improving economic outlook, expecting a potential reduction in the policy rate during the upcoming Monetary Policy Committee (MPC) meeting.
He also highlighted the record number of accounts opened at the PSX in the last three months, reflecting the growing confidence among individual Pakistanis in the country’s improving economic conditions and their increasing inclination toward savings, spurred by the government’s documentation drive.
This optimism is further reflected in record individual buying activity, totaling $22.1 million this month.
The State Bank of Pakistan’s MPC is set to meet on January 27 to determine the key interest rate. A survey by Topline Securities showed that 61% of participants expect a rate cut of 100 basis points (bps), with 17% forecasting a 200bps cut, 7% predicting a 150bps reduction, and 6% expecting no change.
The survey also indicated that participants are anticipating a rate cut due to high real rates of 950bps in January 2025, compared to the historical average of 200-300bps, despite a 900bps cut in interest rates over the last five consecutive meetings since June 2024. The expected inflation for January 2025 is around 3.5%, driven by faster food disinflation and negative adjustments in electricity prices (FCA).
