Karachi: The KSE-100 index soared to a record close this week, achieving an unprecedented level of 83,532, up by 2.8% despite a noticeable decline in trading volumes and substantial foreign capital withdrawals. Average trade volumes fell by 12% week-over-week to 344 million shares, while foreign investors pulled out approximately US$26 million.

According to JS Global, the market’s robust performance was predominantly fueled by significant domestic investments, particularly from Mutual Funds. This local buying surge offset the impact of foreign outflows amid a series of positive economic indicators. Pakistan is currently experiencing a notable disinflation, with the Consumer Price Index dropping to a near four-year low of 6.9% in September 2024, the lowest since January 2021. Additionally, the State Bank of Pakistan’s reserves have reached a 29-month peak at US$10.7 billion following the receipt of the International Monetary Fund’s initial tranche under a 37-month Extended Fund Facility.

The government recently secured Rs244 billion in a Treasury Bill auction, closely approaching its Rs250 billion target. The yields for six-month and twelve-month tenors have decreased to their lowest since April 2022, marking another economic milestone. Conversely, the trade deficit has expanded by 4% year-over-year in the first quarter of FY25, although exports showed a robust growth of 14% during the same timeframe. However, the Federal Board of Revenue fell short of its quarterly revenue target by Rs87 billion, collecting Rs2,452 billion against a projected Rs2,539 billion.