The KSE-100 made history at the opening bell on Thursday, crossing the coveted 100,000-point level with a 1% gain as soon as trading began, continuing a remarkable turnaround after it had plunged earlier in the week due to violent protests in Islamabad.
Bulls continued from where they left off in the previous session, pulling the index beyond the 100k level with buying across the board as the index completed the journey that saw it rise from around 40,000 in June 2023.
However, profit-taking began soon after as the index retreated to the 99,600 level by 11:20am, but remained in the green zone.
Buying momentum picked up pace in the latter half of the trading session, and the benchmark index again breached the 100,000 level by 2:20pm.
A combination of exchange rate stability, transition from one $3-billion Stand-By Arrangement to another longer facility with the International Monetary Fund (IMF), improvement in index-heavy sector’s earnings, and a general mood for stocks after monetary easing have been just a few factors behind the KSE-100’s phenomenal rise.
“Faster than expected fall in inflation and interest rates adding cash liquidity to the stock market,” said Mohammed Sohail, CEO of brokerage house Topline Securities, in a note.
“Despite the rally, Pakistan still trades at PE of 5x compared to the historical average of 7x.”
However, many also question if the rally has room to continue.
“The positive momentum at the KSE-100 is expected to continue, with a 4-5% increase anticipated by the end of 2024, reaching the 104,000-105,000 level,” Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company (Private) Limited, told media.
“A decline in interest rate has lowered return on other assets. A significant portion of liquidity had been tied up in mutual funds, which has now started to shift towards equities for higher returns.”
This is an intra-day update
The KSE-100 made history at the opening bell on Thursday, crossing the coveted 100,000-point level with a 1% gain as soon as trading began, continuing a remarkable turnaround after it had plunged earlier in the week due to violent protests in Islamabad.
Bulls continued from where they left off in the previous session, pulling the index beyond the 100k level with buying across the board as the index completed the journey that saw it rise from around 40,000 in June 2023.
However, profit-taking began soon after as the index retreated to the 99,600 level by 11:20am, but remained in the green zone.
Buying momentum picked up pace in the latter half of the trading session, and the benchmark index again breached the 100,000 level by 2:20pm.
A combination of exchange rate stability, transition from one $3-billion Stand-By Arrangement to another longer facility with the International Monetary Fund (IMF), improvement in index-heavy sector’s earnings, and a general mood for stocks after monetary easing have been just a few factors behind the KSE-100’s phenomenal rise.
“Faster than expected fall in inflation and interest rates adding cash liquidity to the stock market,” said Mohammed Sohail, CEO of brokerage house Topline Securities, in a note.
“Despite the rally, Pakistan still trades at PE of 5x compared to the historical average of 7x.”
However, many also question if the rally has room to continue.
“The positive momentum at the KSE-100 is expected to continue, with a 4-5% increase anticipated by the end of 2024, reaching the 104,000-105,000 level,” Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company (Private) Limited, told media.
“A decline in interest rate has lowered return on other assets. A significant portion of liquidity had been tied up in mutual funds, which has now started to shift towards equities for higher returns.”
This is an intra-day update
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