KSE-100 Index
During early intraday trading on Wednesday, the Pakistan Stock Exchange achieved a significant milestone as the KSE-100 Index surpassed the 67,000 mark. This remarkable surge was propelled by local investors redirecting their focus towards stocks following a sustained decline in the property sector.
The pivotal factor behind this surge was the State Bank of Pakistan’s decision, announced a day earlier, to maintain the key policy rate at 22 per cent. This decision has instilled confidence that there won’t be any further interest rate hikes in the near future.
Within just six minutes of the trading session, the benchmark index soared to 67,093.96, surpassing the previous closing of 66,426.78. However, as of the latest update around 10:24 am (Pakistan Standard Time), the KSE-100 Index was recorded at 66,778.88, reflecting a gain of 352.10 points, or 0.53 per cent.
Business leaders are eagerly anticipating rate cuts, as the high borrowing costs have rendered it challenging to sustain business operations at viable levels. This situation has hindered expansion efforts and the establishment of new ventures, thereby limiting the creation of much-needed employment opportunities.
The economic stagnation has also resulted in wage stagnation, exacerbating the impact of record-high and persistent inflation, coupled with a weakened rupee due to currency devaluation. This has led to a significant reduction in purchasing power.
Market analysts are anticipating positive impacts from potential rate cuts and are hopeful that direct foreign investments, particularly from Gulf States, will stimulate economic growth. The recent debut of Saudi Arabia’s Aramco in Pakistan’s retail fuels market through a 40 per cent stake in Gas & Oil Pakistan Ltd (GO) has been met with enthusiasm.
It is crucial for new projects and job creation to materialize in order for the general population to experience the positive effects of these economic developments. Mere investments in or acquisitions of existing companies may not directly benefit the broader populace.
