The Pakistan Stock Exchange (PSX) faced intense selling pressure on Thursday, continuing its decline from the previous session. Profit-taking and concerns over foreign outflows dampened investor sentiment, driving the KSE-100 Index down by 4,481.77 points (-4.04%) to an intraday low of 106,588.52. This followed Wednesday’s record single-day fall of 3,790 points, closing at 111,070.29 after reversing early gains.
Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, attributed the bearish trend to concerns about foreign outflows, cautious State Bank of Pakistan (SBP) policy adjustments, rupee instability, and weak global crude oil prices.
SBP data revealed a sharp rise in profit and dividend repatriations by multinational companies, surging 112% year-on-year to $1.128 billion in the first five months of FY25. November alone saw $321.6 million repatriated, a 586% increase compared to the previous year, as restrictions on dollar outflows eased.
Investor concerns also stemmed from The Tax Laws (Amendment) Bill, 2024, which introduces strict measures targeting non-filers. The bill proposes barring non-filers from significant transactions, including purchasing vehicles above 800cc, property, and shares. It also grants the Federal Board of Revenue (FBR) authority to freeze accounts, seal properties, and block transfers for non-compliance, raising fears of reduced consumer spending and liquidity issues.
Despite these challenges, Pakistan’s macroeconomic indicators showed improvement. The current account posted a $729 million surplus in November, the highest monthly figure since February 2015. For the first five months of FY25, the surplus reached $944 million, compared to a $1.67 billion deficit last year. Foreign direct investment (FDI) rose 31% to $1.124 billion, with contributions from China, Hong Kong, and the UK, while remittances surged 29% year-on-year to $2.9 billion in November, totaling $14.8 billion for FY25 so far.
The SBP lowered the policy rate by 200 basis points to 13%, its fifth consecutive cut, as inflation dropped to 4.9% in November, the lowest since April 2018.
