Stocks soar to all-time high as KSE-100 breaches 77,000 mark

The Pakistan Stock Exchange (PSX) achieved a significant milestone on Friday, surpassing the 77,000 mark for the first time. The benchmark KSE-100 index climbed to an all-time high of 77,213.31 points, marking an increase of 1,005.15 points, or 1.32%, from the previous day's close of 76,208.16 points.

This surge is attributed to several key factors. Saad Ali, Director of Research at Intermarket Securities, explained that the market rebounded sharply following the announcement of the 2024-25 budget. Investors had anticipated an increase in Capital Gains Tax (CGT), which did not materialize, leading to renewed confidence and investment. Additionally, expectations of renewed discussions with the International Monetary Fund (IMF) for a new financial assistance program have positively influenced market sentiment.

The previous day, the stock market also saw a record-breaking rise, reaching 76,208.16 points with an unprecedented gain of 3,410.73 points, or 4.69%. Adnan Sheikh, Assistant Vice President of Pak Kuwait Investment Co, noted that the fear of increased CGT had previously caused investors to reduce their market exposure significantly. The absence of this increase in the budget has since alleviated those concerns, leading to a strong market performance.

The 2024-25 budget aims for a modest growth rate of 3.6%, balancing the need to satisfy IMF requirements while addressing fiscal challenges through increased taxation. This budget strategy is intended to strengthen Pakistan's position in securing a new bailout deal from the IMF, with an anticipated loan amount between $6 billion and $8 billion, crucial for averting a potential economic default.

Overall, the PSX's recent performance reflects a renewed optimism among investors, driven by favorable budget announcements and the potential for international financial support.