The stock market continued its record rally on Friday, fueled by the upward feeling before corporate profits and expectations of monetary flexibility.
Benchmark’s KSE-100 index of the Pakistan Stock Exchange (PSX) touched an intradic maximum of 140,585.38 points, marking a gain of 1,919.89 points, or 1.38%, while the lowest level of the day was recorded at 138,938.04 points.
“The actions are negotiated in a new historical maximum before the main profit ads that are due next week and probably the SBP policy that decreases amid the thin inflation,” said Ahsan Mehanti, managing director and CEO of Arif Habib Commodities.
“The expectations on strong financial results and annual payments played a catalyst role in the upward activity in PSX,” he added.
Sana Tawfiq, director of Research at Arif Habib Limited, said: “Moment to continue in the midst of the results season. However, there will be episodes of taking into account.”
The optimism of investors was supported by the recent comments of the Minister of Finance with respect to monetary flexibility. On Monday, the Minister of Finance, Muhammad Aurengzeb, declared that there was room to reduce the interest rate, although the decision lies only in the State Bank of Pakistan (SBP).
At its last policy meeting, the SBP maintained the reference interest rate in 11%, citing inflationary risks and geopolitical uncertainties after the Iran-Israel conflict. The date for the next meeting of the Monetary Policy Committee has not yet been announced, but is expected at the end of July.
The feeling of investors remained floating after the latest SBP data, which showed that the central bank’s foreign exchange reserves increased by $ 23 million to $ 14,526 billion in the week that ended on July 11, exceeding the aim of $ 13.9 billion of the IMF of the IMF.
Although Liquid general reserves decreased $ 72 million to $ 19,957 billion, the increase in SBP-HELD reserves was backed by multilateral tickets, remittances and purchases in progress in dollars in the interbank market.
Further reinforcing the bullish mood, the Government successfully raised RS342 billion through the Pakistan Investment Bonds (GDPs) of fixed rate, exceeding its objective of RS300 billion.
Cutting yields in several tenors decreased in all areas, reinforcing the expectations of additional monetary flexibility. The two -year GDP yield fell by 54 basic points to 10,848%, while the performance of three -year bonds decreased by 35 basic points to 11.05%. The results of the auction showed a drop in yields, reinforcing the expectations of additional monetary flexibility.
The five -year bond yields fell by 31 basic points to 11.39%, and the 10 -year tenor yield fell into 30 basic points to 12.2%. No offers for 15 -year -old bonds were accepted.
The upward trend extended since Thursday, when the KSE-100 had increased by 2,285.53 points, or 1.68%, to close to 138,665,49. That session saw an intradic maximum of 138,943.47 points and a minimum of 136,674.98 points.
