Shares at PSX gain over 700 points on renewed rate cut hopes
Bulls maintained their position at the Pakistan Stock Exchange (PSX) on Friday as shares gained over 700 points in intraday trade.
The KSE-100 index gained 712.53 points, or 0.98 per cent, to stand at 73,370.58 points at 10:58am from the previous close of 72,658.05.
Yousuf M. Farooq, director of research at Chase Securities, said traders were expecting inflation to clock in at close to 15pc for May and for interest rates to decline over the next [financial] year, which caused some excitement in cyclicals today.
Raza Jafri, chief executive of EFG Hermes Pakistan, also said monetary easing expectations continue to build up, with real interest rates now about +5pc and the external account exhibiting comfort.
“Hitherto underperforming leveraged sectors such as cement are seeing buying interest, from both local and foreign investors,” he highlighted.
Mohammed Sohail, chief executive of Topline Securities, mentioned expectations that inflation may fall at a faster rate than expected. He noted that investors had been buying shares in companies that would benefit from lower interest rates.
A day ago, the stock market had snapped a three-day losing streak as selective value-hunting helped the benchmark KSE 100-share index close the session in the green territory.
Ahsan Mehanti of Arif Habib Corporation attributed the PSX’s mild recovery to the World Bank’s reaffirmation of collaborating with Pakistan in structural reforms and sustainable development.
Among other factors he highlighted were the deliberations over privatising ailing state-owned enterprises, speculations ahead of new loan talks with the IMF, and the likely visit of the Saudi crown prince to seal investment deals under the Special Investment Facilitation Council.
More to follow