Karachi, December 12,2024: The Pakistan Stock Exchange (PSX) achieved a historic milestone on Thursday as the KSE-100 Index crossed the 114,000-point mark for the first time, closing at 114,180.5 points, up by 3,370.29 points (3.04%). The index reached an intraday high of 114,408.62, fueled by investor optimism and expectations of monetary easing.
Analysts attributed the rally to improved liquidity following rate cuts, which shifted investments from bonds to equities. Positive macroeconomic indicators, such as a sharp 79% year-on-year decline in the Current Account Deficit to $217 million during the first two months of FY2025, have further buoyed market sentiment.
Exports are forecast to reach $33 billion by FY2025, driven by stable exchange rates and growth in key trading partner economies. Service exports, especially in IT, are also projected to increase from $3.2 billion in FY2024 to $4.2 billion in FY2025. Meanwhile, remittances are expected to climb to $33.5 billion, aided by government incentives and reduced global inflation.
The government’s recent cut in Treasury Bill yields by up to 100 basis points, coupled with a successful Rs1.256 trillion auction, signals further monetary easing. Analysts predict the State Bank of Pakistan (SBP) may reduce the policy rate by up to 200 basis points in its December 16 meeting, following November’s inflation drop to 4.9%—the lowest since April 2018.
Economic activity remains strong, with a 62% year-on-year increase in car sales in November and significant foreign support, including a $3 billion deposit extension from Saudi Arabia. The Asian Development Bank’s $530 million loan approval for infrastructure and social programs further underscores confidence in Pakistan’s recovery.
As expectations of rate cuts grow, the PSX rally reflects robust investor confidence in Pakistan’s economic stability, setting the stage for sustained market growth.
