News Desk
The stock achieved another milestone surpassing the 116,000-point mark for the first time during early trading, reflecting sustained investor optimism driven by expectations of a policy rate cut by the State Bank of Pakistan (SBP).
Improving macroeconomic indicators such as robust remittance inflows, stable foreign reserves, and declining inflation have reinforced confidence in the country’s economic recovery.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index climbed 2,220.4 points, or 1.94%, to reach an intraday high of 116,522.2 during early trading, building on last week’s record-breaking performance.
The market remains buoyed by anticipation of the Monetary Policy Committee (MPC) announcement scheduled for later today, with expectations of a rate cut ranging from 200 to 500 basis points. Businesses are advocating for an aggressive cut to stimulate growth, while analysts predict a more measured adjustment.
November’s inflation rate fell to 4.9%, creating a positive real interest rate of 10% and substantial room for monetary easing. Investors are further encouraged by the government’s revision of National Savings Schemes (NSS) profit rates, which saw a 250 basis point cut in Savings Account returns. This move is expected to redirect funds from savings instruments into equities, bolstering market activity.
Foreign inflows also remain strong. Remittances rose by 29% year-on-year to $2.9 billion in November, contributing to stable foreign reserves of $16.6 billion as of December 6, 2024. Reserves held by the SBP increased to $12.051 billion, the highest since March 2022.
Meanwhile, the Current Account Deficit (CAD) narrowed significantly by 79% year-on-year to $217 million during the first two months of FY2025, supported by strong remittance inflows and stable export earnings.
Exports are projected to reach $33 billion by the end of FY2025, while remittances are forecasted to climb to $33.5 billion, driven by government incentives and easing global inflation. Economic recovery is also evident in automobile sales, which surged 52% year-on-year in November, reflecting robust consumer demand.
