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Bulls continued to dominate the trade floor on Tuesday as shares at the Pakistan Stock Exchange (PSX) surged by more than 600 points on optimism over investment from Saudi Arabia.
Pakistan’s benchmark share index breached the key 70,000 level to touch an all-time high, its fourth consecutive session of hitting a record, according to data from the Pakistan Stock Exchange website.
The KSE-100 index climbed up to 70,493.02, up by 873.04 points or 1.25 per cent, from the previous close of 69,619.98 points at 10:57am. The index closed at 70,314.71, up by 694.73 or 1pc, from the previous close.
Mohammed Sohail, chief executive of Topline Securities, noted that the market crossed the 70,000 milestone “amid positive news on Saudi investment and deposits”.
A day earlier, Saudi Arabia committed to fast-tracking the initial tranche of $5 billion investment in Pakistan, while Islamabad promised to facilitate the expedited process aimed at enhancing economic cooperation between the two countries.
The agreement was reached at a meeting between Saudi Crown Prince Mohammed bin Salman and Prime Minister Shehbaz Sharif in Makkah on Sunday night. The premier was on a three-day visit to pursue economic support from the kingdom.
“Continuous foreign buying is also helping equities,” Sohail said, adding that the benchmark KSE-100 index is now up by almost 70pc from June end.
Shahab Farooq, director of research at Next Capital Limited, echoed the same sentiment. “Optimism of investment package from Saudi Arabia, high remittances, and continued foreign buying are fueling positive sentiments in the market,” he said.
Earlier, the State Bank of Pakistan (SBP) date showed that remittances increased to almost $3 billion in March, taking it to the highest level since April 2022, primarily due to Ramazan.
Yousuf M Farooq, director of research at Chase Securities, said, “The market has continued to rally on optimism regarding the economy.
“Remittance numbers for March 2024 came in at $3bn, likely resulting in a current account surplus for the month, which bodes well for currency stability,” he said, adding that the surplus would likely exert downward pressure on inflation by keeping the currency stable.
“Lower inflation should lead to lower interest rates and higher valuations at the stock exchange. Participants are factoring in expectations of better earnings and lower interest rates going forward,” he said.
Awais Ashraf, director of research at Akseer Research, said, “Saudi Arabia’s announcement to expedite a $5bn investment in Pakistan during the recent trip of PM Shehbaz has helped increase investor confidence.”
He noted that the market sentiment “was already boosted by expectations of monetary easing due to a declining inflationary trend and the government’s continuation of tough economic decisions, such as the privatisation of the Pakistan International Airlines (PIA)”.
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