PSX crosses 93,000-mark fuelled by energy rally in intra-day trade
1. KSE-100 index rises to 93,487 points after jumping 966 points
Stocks soared on Friday, reaching a record intraday high above 93,000 points as investor sentiment remained buoyant following a larger-than-expected policy rate reduction. Optimism was further bolstered by expectations that the central bank might ease its monetary stance even further before year-end.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index climbed 966 points, reaching 93,487 points around midday, up from the previous close of 92,520.48 points.
Khurram Schehzad, CEO of Alpha Beta Core, noted that investors were embracing an economic rebound spurred by the State Bank of Pakistan’s (SBP) hawkish monetary extension on November 4, with inflationary pressures subsiding. “There are expectations of a rate cut up to 400 basis points by December, as there’s room for easing,” Schehzad stated, suggesting that the SBP’s Monetary Policy Committee (MPC) might lower rates further within the year.
Schehzad added that the current bull run largely reflects the central bank’s long-anticipated rate-cutting cycle. Recently, the SBP reduced its policy rate by a record 250 basis points to 15%, aiming to boost a slow economy amid declining inflation. The central bank highlighted that this monetary stance is appropriate to stabilize prices and keep inflation within its 5-7% target.
“This approach will also bolster macroeconomic stability and support sustainable economic growth,” the SBP stated.
Saad Ali, Director of Research at Intermarket Securities, commented that the ongoing optimism was primarily driven by oil and gas stocks, given their robust cash flows and dividends. Ali also noted that “yesterday’s Sukuk auction, where the one-year Fixed-Rate Discounted (FRD) yield dropped to 10.99%, further raised expectations of accelerated rate cuts, lifting investor confidence.”
The government raised Rs331.7 billion through an auction of Sukuk bonds on the PSX, surpassing its Rs300 billion target for the 15th Government of Pakistan Ijarah Sukuk (GIS) auction, which drew substantial interest with bids totaling Rs875.22 billion.
The auction saw significant yield declines, with the one-year FRD yield falling 76 basis points to 10.99%. In the Fixed Rental Rate (FRR) category, yields dropped to 11.5% for three-year (-50 bps), 12.1% for five-year (-43 bps), and 11.7% for 10-year (-104 bps) Sukuk bonds.
