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Markets

Pakistan stock market gains 1.9% to reach all-time high

Leading trader says the market went up because of fresh liquidity infusion from financial institutions

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Haris Zamir

Business Editor

Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)

Pakistan stock market gains 1.9% to reach all-time high

A snapshot of trading activity at the Pakistan Stock Exchange on Friday

PSX Website

The Pakistan Stock Exchange (PSX) reached an all-time high during the week's last session after the National Assembly passed the Finance Bill for the upcoming fiscal year, which investors believe will convince the International Monetary Fund (IMF) to approve the next tranche of the $7 billion loan program.

The benchmark KSE-100 index gained 2,332.6 points or 1.91% during Friday to close at 124,379.06 points.

The government introduced no harsh measures in the revised Finance Bill. On the contrary, some harsh measures were tweaked, keeping investor sentiment positive, analysts said.

All key measures announced in the budget were in line with IMF discussions, signaling that Pakistan would breeze through the next review, they added.

A leading trader told Nukta that the market also went up because of fresh liquidity infusion from financial institutions, which generally park their investments in mutual funds.

Under the Finance Bill, the tax rate on dividends from mutual funds has been raised to 29% from 25% from the commencement of the new fiscal year.

This step might lead to institutions, high-net-worth individuals and other companies selling their mutual fund holdings and investing in the stock market instead, he added.

Meanwhile, equity expert Jibran Sarfraz said that a reduction in regional tensions, the Israel-Iran ceasefire, and Pakistan's improving relations with the West acted as a morale booster for investors.

Moreover, he said that with the expected resolution of the circular debt issue, fresh investments would be made in energy scrips.

An analyst said that the federal budget's approval by the National Assembly and the central bank's statement that Pakistan would soon receive $3.5 billion paved the way for fresh buying.

He added that year end buying from financial institutions and insurance companies boosted the overall sentiment, helping index to close at all-time high.

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