As bulls took back control of the trading floor on Thursday, shares at the Pakistan Stock Exchange (PSX) reached yet another all-time high of 94,000. Analysts attributed the record to growing macroeconomic stability.
The PSX recovered just 131 points yesterday after breaking its record-breaking streak on Tuesday as investors engaged in value-hunting.
Around 11 a.m., the benchmark KSE-100 rose 548.58 points, or 0.59 percent, from the previous closing of 93,355.42 to 93,904.00. Ultimately, the index ended the day at 94,191.89, up 836.47 points, or 0.90 percent, over the finish of the previous day.
Investors are shifting more money into stocks as fixed-income mutual fund returns fall, according to Yousuf M. Farooq, director of research at Chase Securities.
He emphasized that while certain tax modifications could be required to fulfill targets, “macro indicators appear stable,” and that things were generally getting better.
In addition to sales of vehicles and fast-moving consumer goods (FMCGs), Farooq observed that cyclic debt buildup had stopped and that bike sales were increasing. He emphasized that the real estate market was also “displaying indications of activity, and buyers are feeling a sense of urgency because they are afraid of missing out.”
Large rallies, however, may result in sudden, drastic corrections. He warned, “Stocks are long-term instruments and should not be bought with money that is needed in the short term. Investors should be mindful of what they are buying and understand their reasons for doing so.”
“The attractive valuation of the KSE-100 index is drawing investors back to equities, driven by declining fixed income yields and commodity prices along with strengthening macroeconomic stability,” said Awais Ashraf, director of research at AKD Securities.
“We are now in a stronger position to secure more flexible terms with IMF, as previously anticipated in the board’s review, with a controlled current account and an overall improved fiscal outlook,” he said.
