Bulls toss stocks above 95,000 in intraday trade
Bulls maintained their control over the trade floor as shares at the Pakistan Stock Exchange(PSX) surged more than 800 points on Tuesday in intraday trade.
The benchmark KSE-100 index climbed 812.70 points, or 0.86 per cent, to stand at 95,808.37 points from the previous close of 94,995.67 points at 11:08am.
Sana Tawfik, head of research at Arif Habib Limited, said that the positive momentum was continuing due to improving macro economic indicators and improved liquidity.
“Although there are risks on the political front, I think the fundamentals are still intact,” she observed, adding that positive momentum was maintained especially due to the current account surplus.
According to the State Bank of Pakistan’s data, released on Monday, the country witnessed a third straight monthly surplus of $349m surplus in October compared to $86m in September, reflecting consistency in the government’s policy to restrict imports,
It was highly encouraging for the government to see the current account with a positive $218m during the July-October period against a deficit of $1.528 billion in the corresponding period last year.
Awais Ashraf, director research at AKD Securities, credited the bull run to the International Monetary Fund (IMF)’s “positive statement following the conclusion of its mission visit has alleviated concerns about a potentially inflationary mini-budget, boosting investor confidence”.
“Meanwhile, consistent buying by mutual funds this fiscal year, driven by monetary easing, has helped offset foreign outflows linked to FTSE rebalancing and selling by banks,” he highlighted, adding that banks, in turn, have been selling to realise capital gains in order to mitigate the impact of advance-to-deposit ratio (ADR) taxation on profitability.
In July, FTSE Russell, a global index provider, had announced that Pakistan had failed to meet the minimum securities count requirement for retaining secondary emerging market status, which resulted in foreign outflows.
The inflow of positive economic numbers has helped the stock market maintain its bullish momentum the past week, propelling the benchmark KSE-100 index to an all-time high above 95,000 during intraday trade last week.
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