The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index soared past the 80,000 mark on Wednesday, driven by heightened investor interest in state-owned enterprises (SOEs) and the anticipation of an interest rate cut.
The KSE-100 gained 739.71 points, or 0.93%, to reach 80,292.59 points during intraday trading, up from the previous close of 79,552.89 points.
Raza Jafri, CEO of EFG Hermes Pakistan, attributed the gain to a surge in buying interest in SOEs like the National Bank of Pakistan (NBP) and Oil and Gas Development Company (OGDC), fueled by reports of privatisation efforts, strategic stake sales, and resolutions to longstanding issues.
“This optimism is coupled with increasing hopes of significant interest rate cuts in the second half of 2024 and a timely entry into an International Monetary Fund (IMF) programme,” Jafri told Geo.tv.
Finance Minister Muhammad Aurangzeb, speaking after the National Assembly passed the FY25 budget last week, outlined a two-to-three-year privatisation plan. Minister for Privatisation Aleem Khan confirmed the federal government’s intent to privatise around 24 SOEs, with Pakistan International Airlines expected to be the first.
Intermarket Securities Director of Research Saad Ali highlighted optimism regarding the IMF programme and the continuation of macroeconomic recovery following the budget’s smooth passage as key factors for the market’s rise.
“The market continues to re-rate from still low valuations with the prospect of lower interest rates in the future,” Ali noted.
The previous day’s closing at 79,552.89 points saw stocks climb significantly amid expectations of improved earnings in the half-year results by SOEs in the oil sector.
