Karachi: The Pakistan Stock Exchange (PSX) concluded the week on a positive note, with the KSE-100 index marking a gain of 756 points or 1.0%, closing at 78,801 points. This upswing was propelled by a combination of favorable t-bill yield declines and robust corporate earnings.
According to AKD Securities Limited, the driving force behind the market’s upbeat performance was primarily the significant drop in t-bill yields observed during Wednesday’s auction, where cuts ranged from 74 to 148 basis points. This brought the 3-month yield down to 17.49%, setting the stage for market anticipations of a substantial rate cut in the upcoming Monetary Policy Committee (MPC) meeting scheduled for September 12, 2024. The rerating of high dividend-yielding stocks like FFC and UBL, which added 236 and 189 points respectively to the index’s weekly gains, underscored the positive market sentiment.
Additionally, the pharmaceutical sector saw strong performance, buoyed by better-than-expected financial results and the deregulation of non-essential drugs. On the macroeconomic front, the IMF Executive Board’s approval for Pakistan’s financial aid, previously anticipated in August, has been deferred to September due to unmet debt rollover requirements, although the Finance Minister remains optimistic about securing the approval next month.
Market participation expanded significantly, with a 27% week-over-week increase in average daily traded volume, reaching 468 million shares. The Pakistani Rupee maintained stability against the US dollar, closing the week at 278.50/US$. Other notable economic indicators included a 64% year-over-year increase in July’s Foreign Direct Investment (FDI), reaching US$136.3 million, and a 0.92% year-over-year growth in the Large Scale Manufacturing (LSM) sector.
Sector-wise, the top performers were Woollen, Jute, and Leather and Tanneries, each posting gains of over 11% week-over-week. Conversely, sectors such as Tobacco, Automobile Assemblers, and Textile Weaving lagged, reflecting declines in their respective indices.