The stock market continued its record -breaking rally on Friday, driven by Bullish atmosphere prior to the company’s earnings messages and expectations of monetary easing.
Pakistan Stock Exchange’s (PSX) Benchmark KSE-100 index touched at an intraday height of 140,585.38 points marking a gain of 1,919.89 points or 1.38%, while the lowest level of the day was registered at 138,938.04 points.
“Shares that deal with a new one constantly high in front of major earnings announcements that are due next week, and probably SBP policy that is facing in the midst of thin inflation,” said Ahsan Mhanti, CEO and CEO of ARIF HABIB-Råves.
“Expectations over strong financial results and annual payments played catalyst role in Bullish activity at PSX,” he added.
Sana Tawfiq, head of research at Arif Habib Limited, noted: “Momentum to continue in the middle of the result season. However, there will be episodes of profits.”
Investor optimism was further supported by the Finance Minister’s recent comments regarding Monetary Relief. On Monday, Finance Minister Muhammad Aurangzeb stated that there was room to reduce interest rates, although the decision is solely in the State Bank of Pakistan (SBP).
In his last political meeting, the SBP benchmark interest rate kept at 11%with reference to inflation risks and geopolitical uncertainties following the Iran-Israel conflict. The date of the upcoming monetary policy committee meeting has not yet been announced, but is expected at the end of July.
Investor mood remained fluid after the latest SBP data showing the Central Bank Currency Exchange reserves increased by $ 23 million to $ 14,526 billion in the week ending on July 11, and IMF’s target of $ 13.9 billion surpassed.
Although the total floating reserves dropped $ 72 million to $ 19,957 billion, the increase in SBP-Held reserves was supported by multilateral influxes, transfers and ongoing dollar purchases from the interbank market.
Further reinforcement of the bullish atmosphere successfully raised the government successfully RS342 billion through the auction of Pakistan Investment Bonds (PIBs) that exceeded its RS300 billion goals.
The cut -off yield on various tenors fell everywhere and strengthened expectations of further monetary easing. The dividend of two-year-old PIBs fell by 54 basic points to 10,848%, while the yield of three-year bonds fell by 35 basic points to 11.05%. The auction results showed a decrease in the yield, which strengthens the expectations of further monetary relief.
Five-year bonds fell by 31 base points to 11.39%, and the 10-year tenor yield fell by 30 basic points to 12.2%. No bids were accepted for the 15-year bonds.
The Bullish trend stretched from Thursday when the KSE-100 had risen by 2,285.53 points, or 1.68%, to close at 138,665.49. This session saw an intraday high at 138,943.47 points and a low low level of 136,674.98 points.
