The Pakistan Stock Exchange (PSX) saw a remarkable surge on Monday, as the benchmark KSE-100 Index surpassed the 115,000-point milestone for the first time in history.
The trading session began strongly, with the KSE-100 Index reaching an intraday high of 115,826.94 points before stabilizing at 115,443 points by midday.
This achievement builds on last week’s record-breaking performance when the index closed at 114,301 points, gaining 5,247 points.
Market analysts attribute this surge to robust remittance inflows, declining inflation, and expectations of a rate cut in the upcoming monetary policy decision by the State Bank of Pakistan (SBP). The SBP’s Monetary Policy Committee (MPC) is expected to announce a rate reduction of 200 to 500 basis points later today.
The PSX’s performance is reflective of broader economic improvements. November’s inflation rate fell to 4.9%, creating room for potential monetary easing. Meanwhile, the government’s decision to reduce National Savings Schemes (NSS) profit rates by 250 basis points has redirected funds into the equity market.
Remittances surged by 29% year-on-year to $2.9 billion in November, boosting foreign reserves to $16.6 billion as of December 6, 2024. Reserves held by the SBP rose to $12.051 billion, the highest level since March 2022. Additionally, the Current Account Deficit (CAD) narrowed by 79% year-on-year to $217 million during the first two months of FY2025, supported by stable exports and strong remittance inflows.
The PSX also set multiple records last week, including a market capitalization exceeding $52 billion—the highest in three years—and daily trading volumes surpassing Rs1.5 billion. A total of 6.81 billion shares worth Rs302 billion were traded, with the index fluctuating within a 7,546-point range.
The bullish trend continued into Monday, with businesses and investors remaining optimistic about macroeconomic stability and the potential for significant monetary easing.
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Key sectors are showing positive signs, with automobile sales rising by 52% year-on-year in November, indicating robust consumer demand. The banking sector has also improved, with the advance-to-deposit ratio (ADR) rising to 47.8% in November from 44.3% in October.
The government’s initiatives to modernize the power distribution network and expand social protection programs have further bolstered investor confidence. Last week, the Asian Development Bank (ADB) approved $530 million in loans to support these efforts.
Optimism ahead of the SBP’s policy announcement is high, as the market’s performance reflects a reduction in political uncertainties and a positive outlook for the country’s economic recovery. Analysts expect the SBP’s rate decision to fuel the bullish momentum, especially if the central bank opts for a significant rate cut.
With exports projected to reach $33 billion and remittances forecasted at $33.5 billion by the end of FY2025, the PSX is expected to maintain an upward trajectory in the coming weeks.
“The KSE-100 Index’s historic achievement highlights growing investor confidence in Pakistan’s economic future,” said a market expert. “Ongoing macroeconomic stability and supportive policies are likely to sustain this positive momentum.”
