Karachi: The KSE-100 index gained momentum in August 2024, marking a 0.8% month-over-month increase, and solidifying a year-to-date return of 26%. This rise is attributed to the sixth consecutive month of gains this year, accompanied by a substantial 32% surge in trading volumes, averaging 539 million shares daily. Despite this increase, the value traded grew marginally due to the dominant activity in penny stocks.

According to JS Global, foreign investors have continued their buying streak, remaining net buyers for the seventh consecutive month, contributing an additional US$9 million to the eight-month calendar year total of US$100 million. The pharmaceutical sector notably outperformed the index with an 11% increase, boosted by robust profitability during the current earnings season. National Bank of Pakistan also stood out, benefiting from resolutions related to pensioner settlements.

The anticipation of the International Monetary Fund’s (IMF) board approval for a US$7 billion Extended Fund Facility, which has been delayed, remains high. The delay is linked to unresolved issues regarding the extension of debt tenures by other lenders, notably China. Meanwhile, Moody’s has upgraded Pakistan’s rating for the first time in nine years, reflecting an improvement in macroeconomic conditions and expectations of the IMF’s nod in the forthcoming weeks.

As the market looks forward to the central bank’s policy decision, expected to cut the policy rate by 150 basis points in September, investor sentiment remains cautiously optimistic. This anticipated adjustment could potentially reinforce a re-rating of the Pakistan Stock Exchange, with a forecasted increase in market P/E to 4.7x from the current 3.7x.