PSX hits record intraday high near 96,000, led by upbeat data

**Capital Market Extends Record-Breaking Rally**  

The capital market maintained its upward momentum on Tuesday, nearing the 96,000-point milestone in intraday trading, driven by encouraging macroeconomic indicators and policy clarity from the finance minister.  

Building on Monday’s rally, the Pakistan Stock Exchange's (PSX) KSE-100 Index climbed 930.72 points, or 0.98%, to reach an intraday high of 95,926.39. Starting at the previous close of 94,995.67, the market retained its positive trajectory, fueled by robust performances in key sectors such as telecommunications, banking, and energy.  

Among the most actively traded stocks were Hascol Petroleum, Waves Home Appliances, and TPL Properties, reflecting strong retail and institutional participation.  

Investor confidence surged following Finance Minister Mohammad Aurangzeb’s assurance that Pakistan’s $7 billion IMF loan program remained secure after the IMF’s recent visit. The minister confirmed there were no discussions of additional taxes for salaried individuals or the manufacturing sector.  

Muhammad Saad Ali, Director of Research at Intermarket Securities Ltd, highlighted the positive implications: “The IMF mission’s conclusion without demands for new taxes or a mini-budget is a significant boost for the market rally. Institutional investors are net buyers, driven by a sharp drop in interest rates and expectations of further declines.”  

The market showed little concern over planned protests by the Pakistan Tehreek-e-Insaf (PTI) later this month.  

Adding to the optimism, the government announced a landmark decision allowing Exploration and Production (E&P) firms to sell 35% of future gas discoveries to the private sector, aiming to reduce circular debt in the energy sector. The Implementation Framework for the amended E&P Policy 2012 is set for final approval, signaling more opportunities for private-sector involvement.  

The technology sector also boosted market sentiment. Remittances from information and communication technology (ICT) exports rose 34.9% year-on-year to $1.206 billion during July-October 2024, with October alone recording a 38.6% increase to $330 million compared to last year.  

**Macroeconomic Improvements Drive Confidence**  

Sana Tawfik, Head of Research at Arif Habib Limited, noted the role of improving macroeconomic indicators in sustaining the bullish trend. “Inflation trends are favorable, with FY25 projected at an average of 7.5%. For November 2024, inflation is expected to fall to 4.5%-5%, a notable decline.”  

The current account surplus further bolstered confidence, with the State Bank of Pakistan (SBP) reporting a $349 million surplus for October 2024—the third consecutive monthly surplus. This improvement is attributed to a 7% month-on-month and 24% year-on-year increase in remittances. Foreign exchange reserves reached a two-year high, further strengthening the economic outlook.  

In the first four months of FY25, the cumulative current account surplus stood at $218 million, compared to a $1.53 billion deficit in the same period last year. Foreign Direct Investment (FDI) also grew 32% year-on-year to $904.3 million for July-October, despite a slight dip in October.  

As reserves are projected to exceed $11 billion, local mutual funds are shifting investments from fixed-income securities to equities, driving a 20% surge in the benchmark index since September.  

**Outlook and Key Triggers**  

Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, emphasized the positive macroeconomic factors, saying, “Stocks are buoyant on reports of a current account surplus. Investors are optimistic about surging reserves and government reforms in state-owned enterprises, independent power producers, and energy pricing.”  

He added that easing political tensions could further support the market’s upward trajectory.  

Monday’s rally was led by telecommunication and financial stocks, with PTCL and Sui Southern Gas Company standing out as top performers. Analysts attributed the continued market surge to structural reforms, strong corporate earnings, and the absence of a mini-budget.  

The IMF’s recognition of Pakistan’s progress in improving its tax-to-GDP ratio and the government’s focus on reforms have strengthened investor confidence, creating a positive outlook for the capital market.