KARACHI:
The Pakistan Stock Exchange (PSX) hit a new all-time high of over 63,500 points before mid-day on Wednesday, as the return of foreign investors to the local bourse provided confidence for local investors to continue buying stocks.
PSX benchmark KSE-100 Index rose to a new high at 63,611.50 points, increasing by 1pc, or 655.48 points, during trading on Wednesday compared to Tuesday’s close at 62,956.02 points.
The market has staged the fastest rally during the past two decades, rising by almost 60pc, or over 23,600 points, in slightly over five months to date. The index stood at around 40,000 points in June 2023.
Read Improved economy propels PSX to new highs
Talk in the market suggests that foreign investors are making renewed purchases at the PSX following stabilisation in the rupee-dollar parity, the emergence of early signs of economic recovery and the return of political stability with preparations for the next general elections scheduled for February 2024.
Investors had remained net sellers in the market for a few years, mainly due to the high volatility in the rupee-dollar exchange rates. The exchange rate has remained stable near and around Rs 285 against the US dollar for the past three weeks, encouraging investors to take fresh positions at the PSX.
The penny power and telecom stocks, i.e. K-Electric and WorldCall Telecom (WTL), were the top two volume leaders, followed by Pakistan Refinery Limited (PRL) and other energy stocks.
Read more PSX eyes 32% growth by Dec 2024
Arif Habib Limited (AHL) has projected a 32% growth in the benchmark index over the next 13 months to 81,000 points in December 2024, believing the availability of massive liquidity with investors would pave the way as share prices remain low despite the notable growth in recent months.
Nevertheless, it is important to acknowledge key downside risks to AHL estimates. “These include the vulnerability of the PKR (rupee-dollar exchange rate) to global and local macro- and geopolitical developments, the looming threat of a global macro-slowdown, the resurgence of international commodity prices, political instability, and extremely aggressive structural reforms that could hurt growth in the short to medium term.”
