Pakistan stocks to keep attracting investors on attractive valuations

Pakistan's stock market is expected to keep a positive trend in the coming week, thanks to some stocks trading at attractive prices that are drawing investor interest.

This week, the State Bank of Pakistan (SBP) reduced the policy rate by 250 basis points to 15%, driven by falling inflation. This marks the fourth rate cut in a row, reducing the total by 700 basis points from a high of 22%.

Eight Pakistani companies were added to the MSCI Frontier Markets Small Cap Index this week, which is expected to attract global investors and boost foreign funds.

In other news, the government is finalizing its strategy for talks with the IMF Staff Mission scheduled for November 11-15, 2024. Prime Minister Sharif has also sent a special delegation to Saudi Arabia to finalize $2.8 billion in agreements recently signed between the two countries.

With these positive factors, Pakistan stock exchange is likely to attract investor interest, leading to improved liquidity and increased participation.

The KSE-100 index closed the week ending November 8, 2024, at 93,292, up by 2.7%. Foreigner selling was witnessed during this week, clocking in at $4.65 million compared to a net buy of $1.97 million last week.

Indian Stocks

The BSE-100 index shed 0.67% during the week ended November 1, 2024.

Indian shares gained in a special one-hour "muhurat" trading session on Friday to celebrate Diwali, led by auto stocks with positive sales data.

Since last Diwali, Indian stocks have risen about 25%, thanks to stable policies, strong economic and corporate growth, and more retail investors.

However, in October, the market ended a four-month winning streak, posting its worst performance since March 2020 due to record foreign outflows and weak corporate earnings.

Currency

Pakistani rupee strengthened marginally against the US dollar, appreciating 0.02% in the inter-bank market to PKR 277.73 during the week.

The US Dollar's outlook remains strong as investors anticipate that Donald Trump's protectionist policies will keep it competitive against other currencies.

During his election campaigns, Trump pledged to increase import tariffs by 10% and reduce corporate taxes.