Karachi, The KSE100 index at the Karachi Stock Exchange soared to a new record of 68,417 points this week, reflecting a week-on-week increase of 2%. Despite this climb, average trading volumes witnessed a decline, with a noticeable profit-booking trend, particularly in PIAA shares which fell by 17%.

According to JS Global, the index's performance was influenced by various factors including the government's move to sell shares of ODGC to Saudi investors, sparking a 3% rise in the company's stock. Concurrently, domestic economic factors such as the hike in petrol prices by approximately Rs9.66 per liter and inflation dynamics have played critical roles. The Consumer Price Index (CPI) for March 2024 reported by the Pakistan Bureau of Statistics (PBS) was at 20.7%, with month-over-month inflation rising by 171 basis points, while year-over-year headline inflation hit a 22-month low, resulting in the first instance of positive real interest rates since December 2020.

Pakistan’s trade scenario also showed a mix of dynamics, with a 25% shrinkage in the trade deficit to US$17 billion during the first nine months of fiscal year 2024, attributed to reduced imports and bolstered exports. However, the trade deficit for March increased both year-over-year and month-over-month.

In terms of government securities, the recent treasury bills auction saw a rise in cut-off yields for 6-month papers, while those for 3-month and 12-month maturities remained stable. The State Bank of Pakistan’s reserves held steady at US$8 billion, indicating some level of financial stability.