Daily Times

Before closing in negative, the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index crossed the 49,000 mark during intraday trading on Thursday for the first time in six years, a private TV channel reported.

The index gained 578.13 points and stood at 49,342.68 points at 11:40am. However, it closed at 48,611.18 points, down 153.37 points or 0.31 per cent, from the previous close of 48,764.55 points.

Arif Habib Corporation said that the KSE-100 index had crossed 49,000 points for the first time in six years, adding that the stock market had last achieved this milestone on June 9, 2017.

It further said that the stock market had gained 7,686 points, or 18.5 per cent, since Pakistan had reached a standby agreement with the International Monetary Fund (IMF). Arif Habib Corporation’s Ahsan Mehanti said that stocks were bullish as investors weighed the easing of inflation to 28.3pc in the first month of the current fiscal and the State Bank of Pakistan’s decision to keep the policy rate unchanged.

“Improved $1.6bn trade deficit data for July 2020, the government’s plan to resolve the gas circular debt crises and higher foreign exchange reserves played a catalyst role,” he said. Raza Jafri, head of equity at Intermarket Securities, said the KSE-100 index had continued its rally past the 49,000 mark with the banking and oil and gas exploration sectors continuing to see interest. He also said that the sponsor for Habib Bank Ltd had announced it intended to increase shareholding in the bank, which the market was “treating as a major positive”

“In addition, expected energy reforms are driving up the oil chain,” he said. Salman Naqvi, head of research at Aba Ali Habib Securities, said that there were several reasons for the rally in the stock market, the primary being the government’s efforts to reduce circular debt. He noted independent power producers had been given funds, which had reduced circular debt. Naqvi further said that shares of the exploration and production sector were consistently gaining.

He further said that the central bank had maintained the status quo while announcing the monetary policy, adding that macroeconomic indicators were “going towards positivity”.