KARACHI: The Pakistan Stock Exchange (PSX) experienced a significant surge on Wednesday, with the benchmark KSE-100 index surpassing the 80,000 mark, driven by strong investor interest in state-owned enterprises (SOEs).
The KSE-100 index reached 80,292.59 points during intraday trading, marking an increase of 739.71 points or 0.93% from the previous close of 79,552.89 points.
Raza Jafri, CEO of EFG Hermes Pakistan, attributed the gain in PSX to a burst of buying in SOEs like the National Bank of Pakistan (NBP) and Oil and Gas Development Company (OGDC). He noted that press reports indicating a push on privatization, strategic stake sales, and addressing legacy issues fueled the buying spree. “This comes amid increasing hopes of sizeable interest rate cuts in the second half of 2024 and timely entry into an International Monetary Fund (IMF) programme,” Jafri added.
The government’s privatization plan spans two to three years, Finance Minister Muhammad Aurangzeb said, following the National Assembly’s approval of the budget for FY25 last week. Minister for Privatization Aleem Khan stated that the federal government intends to privatize around 24 SOEs in the coming years, with Pakistan International Airlines expected to be the first enterprise to be privatized.
Intermarket Securities Director of Research Saad Ali cited optimism regarding the IMF programme and the continuation of macroeconomic recovery after the smooth passage of the budget as major factors for the market surge. “The market continues to re-rate from still low valuations and the prospect of lower interest rates in the future,” Ali explained.
On Tuesday, stocks closed significantly higher at 79,552.89 points amid expectations of better earnings in the half-year results by SOEs in the oil sector. Alpha Beta Core CEO Khurram Schehzad noted that the budget’s alignment with most of the IMF’s conditions for a new, larger, and longer programme has bolstered investor confidence in economic reforms and stability.
The recent developments reflect heightened investor optimism and a positive outlook for Pakistan’s economic reforms, privatization efforts, and engagement with the IMF.
