Pakistan's stocks bounced back in emphatic fashion on Thursday, with the benchmark KSE-100 Index gaining 2.57%, its highest this year, to power past the 44,000 level as attractive valuations and days of negativity made way for a bullish run at the bourse.
A negative start that put the index near the 43,000 level was soon followed by a spectacular rally across all sectors with cement, banks, and technology leading the charge.
At close on Thursday, the KSE-100 finished with a gain of 1,111.90 points or 2.57% to settle at 44,333,68.
The recovery comes after months of bearish sentiment at the bourse that saw the index retreat nearly 11% since its recent high in June, when the KSE-100 was around the 48,700-point level.
“Rise in international oil prices, uptrend in global equity markets and a positive outlook for the country by the International Monetary Fund (IMF) helped boost investor confidence,” said Capital Stake in its daily market report.
The IMF has also projected a decline in the government gross debt for Pakistan, from 83.4% of Gross Domestic Product (GDP) in 2021 to 80.9% in 2022. According to the IMF report, 'Fiscal Monitor, Strengthening the Credibility of Public Finances', the net debt for Pakistan is also projected to decline from 74.8% percent of GDP in 2021 to 74.1% in 2022.
Government revenue is projected at 15.4% of GDP for 2022 and 16.6 percent for 2023 against 14.5 percent during the same period of 2021.
IMF projects decline in Pakistan's gross debt
Meanwhile, market talk also suggests the Pakistan Stock Exchange (PSX) has begun consultations with the government to restore tax incentives for companies opting for initial public offerings (IPOs).
Saad Hashemy, Executive Director at BMA Capital, said the market rally could be attributed to multiple factors. “Valuations of a number of stocks have become attractive, as value of some stocks have receded close to 50% owing to recent selling, which has grabbed the attention of investors,” Hashemy told Business Recorder.
He added that positive news coming from the IMF front has also played its part in adding to the postivity.
On the corporate front, Meezan Bank posted a profit of Rs19.8 billion during 9MCY21, fueled by reduced provisioning and higher NFI. This was a YoY increase of 8% and 6% QoQ.
KSE-100 plummets in final hour, ends with 661-point fall
On Thursday, sectors adding gains to the KSE-100 index included banking (237.51 points), cement (213.46 points) and technology and communication (140.35 points).
Volume on the all-share index increased from 354.96 million on Wednesday to 388.6 million on Thursday. The value of the shares trade also jumped, amounting to Rs13.09 billion from Rs12.29 billion on Wednesday.
WorldCall Telecom was the volume leader with 66.16 million shares, followed by Unity Foods Limited with 25.03 million shares, and Telecard Limited with 18.99 million shares.
Shares of 557 companies were traded on Thursday, of which 464 registered an increase, 79 recorded a fall, while 14 remained unchanged.