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Stockbroker monitors share prices during a trading session at the Pakistan Stock Exchange (PSX) in Karachi, Pakistan,17 January 2025. — INP
#PSX #rebounds #political #heat #subsides
The stock market opened the week on a positive note, buoyed by easing political uncertainty, improving macroeconomic indicators, lower inflation and expectations of a supportive monetary policy.
Investor sentiment was also bolstered by a strong current account surplus and plans to strengthen Pakistan’s presence in international financial markets.
Sentencing of former prime minister Imran Khan and his wife Bushra Bibi in a long-awaited verdict last Friday added to the sentiment, providing a sense of closure and cooling political temperatures.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) rose 929.77 points or 0.81 percent to touch an intraday high of 116,201.85 on Monday. The market also recorded a low of 115,732.88, as trading activity reflected hope and expectation of further economic stability.
Mohammad Saad Ali, director of research at Intermarket Securities Limited said, “The market reacted positively to the political developments last Friday, not exonerating Khan, as it now sees lower political temperatures in the near term. “
“Politics was one of the main reasons why the market stalled in the last two weeks,” he added.
Accountability Court judge Nasir Javed Rana sentenced Khan and his wife to 14 and 7 years in prison respectively, while also imposing heavy fines. The politically significant decision ended weeks of speculation, allaying market concerns about prolonged political instability.
Finance Minister Muhammad Aurangzeb announced the government’s plan to launch Panda Bonds by June 2025 to strengthen Pakistan’s engagement with China’s capital markets.
Speaking in an interview, he said that Pakistan plans to raise around $200 million from Chinese investors through the issuance of panda bonds. He added that the move is part of a broader strategy to shift the economy towards export-led growth and a sustainable balance of payments.
The move is in line with the government’s ongoing efforts to expand the tax net and meet International Monetary Fund (IMF) conditions under the $7 billion Expanded Fund Facility (EFF).
According to a statement issued by the Prime Minister’s Office on Sunday, Prime Minister Shehbaz Sharif welcomed Pakistan’s participation in the Digital Foreign Direct Investment Initiative (DCO) of the World Economic Forum (WEF) and Digital Cooperation Organization (DCO) and emphasized the importance of digital growth. has also been highlighted. DFDII).
The first project under the initiative will focus on exports of digital infrastructure and services, with the aim of attracting significant foreign direct investment (FDI).
In the first five months of the current fiscal year, the country’s net FDI increased by 31 percent to $1.124 billion.
Adding to the optimism, the State Bank of Pakistan (SBP) reported a current account surplus of $1.2 billion for the first half of FY25, the highest surplus in 15 years. Boosted by additional remittances and growth in exports. For December alone, the surplus was $582 million, a 109% year-over-year increase.
On the inflation front, the Sensitive Price Index (SPI) recorded a year-on-year increase of 1.16 percent for the week ended January 16, the lowest rate in months. The weekly decline of 0.39% in the SPI reflects softening of prices in key food categories.
Analysts expect this moderation in inflation to influence the SBI’s monetary policy, with a possible revision to the current policy rate of 13%, adding to investor sentiment.
Last week, the KSE-100 index rose 2,025 points (+1.8% week-on-week) to close at 115,272 points, reflecting attractive valuations and institutional value-seeking.
With supportive economic indicators and expected monetary easing, the market is likely to maintain its positive momentum in the coming sessions. However, political uncertainty and volatile crude oil prices are key risks for investors.
