Karachi: The KSE-100 index exhibited a bullish trend throughout the week, culminating in a closing figure of 93,292, marking a 2.7% increase compared to the previous week. The average trading volumes also surged, rising by 31% to reach 735 million shares. The primary catalyst for this upward trajectory was the State Bank of Pakistan’s (SBP) announcement of an additional 250 basis points cut in the policy rate, which now stands at 15%.

According to JS Global, this decision by the SBP was largely driven by a decreasing inflation trend, representing the fourth consecutive rate cut in the current monetary easing cycle. This series of reductions has accumulated to a total of 700 basis points from a peak rate of 22%. Moreover, the market received a further uplift as eight Pakistani companies were newly included in the MSCI Frontier Markets Small Cap Index, a strategic move anticipated to draw global investors and increase foreign capital inflows.

Additionally, Federal Board of Revenue (FBR) data indicates a shortfall in income tax collection during the first four months of the fiscal year 2025. In parallel developments, the government is poised to finalize its strategy for the impending negotiations with the International Monetary Fund (IMF) Staff Mission, scheduled for November 11-15, 2024. Simultaneously, Prime Minister Sharif has dispatched a special delegation to Saudi Arabia to conclude agreements related to the recently signed US$2.8 billion Memorandums of Understanding between the two nations.

Further data from the SBP reveals that remittances for October 2024 reached US$3.05 billion, demonstrating a 24% increase compared to the same period in the previous year. Meanwhile, SBP’s foreign reserves remained stable at US$11.2 billion throughout the week.