KARACHI: Pakistan’s benchmark KSE-100 index increased by 3.4 percent on quarter-on-quarter basis in rupee term and 3.7 percent in USD terms in the third quarter of 2024, marking the sixth consecutive quarter in positive trajectory.
Continuation of positive momentum is attributed to firstly the completion of staff level agreement with IMF at start of the third quarter, IMF board approval and disbursement of first tranche to State Bank of Pakistan (SBP) at the end of this quarter, inflation entering single digits for the first time since October 2021, reduction in policy rate by 300bps to 17.5 percent, improvement in country’s credit rating according to major credit rating agencies Moody’s, Fitch etc., better than expected current account number, which entered surplus in August 2024, and stability in currency amidst strong dollar inflows, a research report of Topline Securities said.
The Pakistan market remained 4th best performer in the second quarter of 2024 with total USD return of 17 percent. However in the third quarter of 2024 the ranking stood at 66 in World Equity Index.
The continuation of positive momentum in stock market has been accompanied by healthy trading activity with average traded volumes in the Cash and Ready market increased by 74 percent YoY to an average of 490.1 million shares per day. The average traded value also jumped by 86 percent YoY to Rs 18 billion/day during third quarter of 20204.
The average volumes in the Futures Market also increased by 61 percent YoY and by 8.0 percent QoQ to 172 million shares per day. The average traded value of the same increased by 57 percent YoY and by 4.0 percent QoQ to Rs 7.2 billion/day. Increase on a QoQ basis is due to lower interest rates in the third quarter of 2024, the report said.
In the third quarter of 2024, foreigners have been Net Sellers of Rs 4.68 billion ($16.8 million) compared to Net Buyers of Rs 18.3 billion ($65.8 million) in the second quarter of 2024. “Reversal of positive trend was due to FTSE rebalancing related foreign selling during the quarter which is expected to trail off into fourth quarter of 2024 as well”, the report said.
Investor concerns regarding FTSE rebalancing related selling were mitigated by selling being absorbed by both local
and foreign investors and the market maintaining its positive momentum,
it added.
On local side, Mutual Funds were major buyers with net buying of $14.2 million followed by Banks and DFIs with net buying of $7.5 million. Individuals were the biggest Net Buyers with buying of $45.8 million. However, Insurance and Companies remained sellers of $15.5 million and $15.5 million respectively in the third quarter of 2024.
Key stocks of KSE-100 index that outperformed market in the third quarter of 2024 included National Bank (NBP) up 62 percent, Mari Petroleum (MARI) up 44 percent, and Fauji Fertilizer (FFC) up 42 percent.
Key sectors that outperformed the market during the quarter included Jute, Pharmaceuticals and Transport.
Copyright Business Recorder, 2024
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