The bulls decided to take control of the Pakistan Stock Exchange (PSX) floor on Monday as the stock gained over 3,900 points on investors’ expectations that the key interest rate would hit single digits in the near future.
The benchmark KSE-100 index rose 3,678.20, or 3.30 percent, to settle at 115,029.37 from the previous close of 111,351.17 at 3:09 p.m.
Finally, the index closed at 115,258.99, an increase of 3,907.82 or 3.51 percent, from the last close, marking the third largest point rally in a single day.
Awais Ashraf, head of research at AKD Securities, attributed today’s move to the end of the year “as institutions aim to close their portfolios at higher rates.”
He further highlighted that a “successful rollover” of approximately Rs 55 billion in futures was contributing to this trend.
He explained that at the end of each month – during the last week – people “who hold positions in futures have to buy shares in the market ready to liquidate their position or they have to buy a new futures contract for the same stock.”
Futures are contracts to buy or sell a specific underlying asset at a future date.
Speaking on the future of the KSE-100 index, Ashraf said: “We believe that the KSE-100 index will record another year of strong returns as interest rates are projected to fall to single digits in 2025 due to a strong external crisis. . account.
“Falling alternative investment returns are expected to make equities the preferred asset class in 2025,” he added. Ashraf noted: “We forecast the KSE-100 index to reach 165,215 by December 25, providing a return of 45 per cent (41 per cent in US dollar terms).
“In addition, the focus on structural reforms and tight fiscal and monetary policies under the IMF program is expected to improve the investment climate and support a market rebound.”
Yousuf M. Farooq, director of research at Chase Securities, said he attributed the rise to comments by Finance Minister Muhammad Aurangzeb, who yesterday predicted that monthly inflation could range between 4 percent and 5 percent and that inflation rates Single-digit interest rates were a possibility. .
On Sunday, while talking about achieving sustainable growth, the Finance Minister noted that inflation had slowed to almost 5 percent, with the interest rate falling to 13 percent.
“These are all things that indicate that the wheels of the economy have begun to turn – and I would be the last person to say that we have achieved everything we said – however, in the last six months the macroeconomic stability that forms the basis It is there so we can achieve sustainable growth,” he said.
However, he warned that the country was still an “import-driven economy” and that it was essential to ensure that they moved towards export-led growth, adding that they had created the foundations so that in 2025 they could move towards sustainable growth. .
