KARACHI: The stock market still onto its positive perspective despite the continued optimism about the economy. It continued its unexpected record-breaking binge in the final days of Ramadan by reaching a new high in the previous short week.
According to Arif Habib Ltd (AHL), the market reached an all-time high over the 68,000 level during the course of the four-day trading week. A significant slowdown in inflation and growing anticipation of an interest rate reversal drove market sentiment.
Additionally, the cut-off yields on Treasury bills increased by 101 basis points in the six-month tenor but stayed the same in the three- and 12-month tenors. Furthermore, there was an increase in gasoline sales of 4 percent year over year and 3 percent month over month.
The rupee added just two paise per week, staying steady at Rs277.93 versus the US dollar.
The KSE 100-share index gained 1,412 points, or 2.11 percent, week over week, and ended at a record 68,417 points as a result.
The bullish momentum, according to AKD Securities Ltd., was caused by reducing inflation to 20.68 percent in March, which resulted in the real interest rate turning positive for the first time in 38 months. In addition, foreign institutions and investors added to the market’s liquidity by purchasing, sustaining its bull run.
During the prior week, foreign purchases totaled $3.9 million, up from $3.6 million the week before. Fertilizer ($0.9m) and commercial banks ($2m) saw significant purchases. Insurance businesses reported selling ($5.6 million), followed by broker proprietary ($1.7 million) on the local front.
But in March, the trade gap increased to $2.17 billion, a gain of more than 56%. Remittances are anticipated to rise as Eidul Fitr draws near, which will aid in keeping the current account balance under control.
Furthermore, even though the 9MFY24 numbers fell within the objective, the Federal Board of Revenue failed its monthly tax collection target for the third straight month.
According to World Bank estimates, the country’s GDP growth objective is expected to be 1.8 percent for the current fiscal year and less than 3 percent for the next two years. As a result, the combined GDP growth rate for the three years will be less than the rate of population growth.
According to reports, the Kingdom of Saudi Arabia is considering investing $1 billion in the Reko Diq project in addition to buying shares of OGDC and PPL.
The average weekly trading value closed at $42 million, while the average trading volume decreased by 7% to 307 million shares.
Major updates included the request by sugar mills to export “expensively produced” sugar, a 3.85% increase in cement dispatches in March, and a 38.02% increase in exports. Urea producers received notifications from Pakistan’s Competition Commission.
According to AKD Securities Ltd, the market is anticipated to shift its attention back to the ongoing IMF negotiations over the new Extended Fund Facility, the next meeting of the monetary policy council, and the corporate results season that follows the Eid vacations.
The forward price-to-earnings ratio stays below 4x even if the market has reached its greatest points, which gives rise to optimism in the market’s fundamentals.
