Pakistan Stock Exchange Named Best Performing Market in Asia

Pakistan Stock Exchange

Pakistan Stock Exchange Becomes Best Market

The Pakistan Stock Exchange (PSX) has witnessed a remarkable rally for the second consecutive week after Eid, securing the title of the “world’s best performing market” on a weekly basis. Investors capitalized on the recently reached agreement with the International Monetary Fund (IMF), driving the index to soar by almost 2,800 points and surpassing the 44,000-point mark.

The Pakistan Stock Exchange experienced a significant upturn in the week following Eid, fueled by positive market sentiment due to the agreement reached with the International Monetary Fund. This article provides an overview of the market’s performance throughout the week, highlighting key events and factors that influenced the rally.

2. Monday: Strong Gains on IMF Agreement

The week began with an impressive daily gain of over 2,400 points on Monday. Extensive buying activity among investors was witnessed as the market responded positively to the long-awaited staff-level agreement with the IMF. This development instilled confidence in the market, signaling a positive outlook for the upcoming days.

3. Tuesday: Profit-taking Pressures

Despite the significant gains on Monday, the market faced a brief bearish phase on Tuesday. Institutions engaged in profit-taking, which exerted downward pressure on the market. However, this dip was short-lived, and the market witnessed a major recovery later in the day, attributed to the positive effects of the IMF deal.

4. Wednesday: Concerns over Liquidity and Depreciation

Wednesday saw a continuation of the downward trend as investors expressed concerns over liquidity risks and the depreciation of the Pakistani rupee. These factors contributed to a relatively flat closing for the day. Investors closely monitored developments in order to make informed decisions about their investment strategies.

5. Thursday: Anticipation of IMF Loan Approval

Investor sentiment improved on Thursday as anticipation grew regarding the upcoming executive board meeting of the IMF. Investors anticipated the approval of a $3 billion loan, which would provide a significant boost to the market. This generated buying interest among market participants and contributed to a positive trading session.

6. Friday: Positive Market Sentiment

The last trading session of the week remained positive, despite the absence of major positive factors. Investors found support from Pakistan’s growing foreign currency reserves, which served as a favorable indicator for market participants. Consequently, the benchmark KSE-100 index surged by 2,755 points, closing at 44,207 for the post-Eid week.

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7. Analyst’s Perspective

Muhammad Waqas Ghani, an analyst at JS Global, emphasized the enthusiasm of investors following the government’s agreement with the IMF. This development fueled market bullishness and instilled confidence in the investment community. Ghani further noted notable performances in sectors such as refinery, technology, and engineering during the week.

8. Notable Sector Performances

Several sectors demonstrated noteworthy performances during the week. The refinery sector experienced positive momentum, propelled by favorable market conditions and increasing demand for petroleum products. The technology and engineering sectors also exhibited strong growth, driven by advancements in technology and infrastructure development projects.

9. Trade Figures and Deficit Reduction

Trade figures for the current fiscal year, FY23, showcased a significant reduction in the trade deficit. The deficit narrowed to $27.5 billion, reflecting a substantial 43% year-on-year reduction. This positive development indicated a healthier trade balance and contributed to the overall market sentiment.

10. Increased Foreign and Local Investor Activity

Foreign investors displayed increased buying activity during the week, with a total investment of $4.7 million. On the local front, selling was reported by banks/DFIs (Development Financial Institutions) and companies. The average trading volumes and value traded experienced substantial increases compared to the previous week, highlighting the heightened investor interest in the market.

11. Overall Market Performance

The Pakistan Stock Exchange showcased a strong performance throughout the post-Eid week, solidifying its position as the world’s best performing market. The substantial weekly return and positive market sentiment were primarily driven by the agreement with the IMF, reduced trade deficit, increased foreign investor activity, and notable sector-wise performances.

12. Conclusion

In conclusion, the Pakistan Stock Exchange (PSX) witnessed a remarkable rally for the second consecutive week following Eid. The market capitalized on the agreement reached with the International Monetary Fund, driving the index to soar and earning the title of the “world’s best performing market.” Positive market sentiment, increased foreign investor activity, and notable sector performances further contributed to the overall success of the PSX.