As per Bloomberg, KSE-100 index is the 3rd best
performing market in last 12 months in the world.
Market capitalization rose to RKR14 trillion (US$49.8
billion), from RKR12.9 trillion (US$45.8 billion) an increase of 8.7%DoD.
According to Topline Securities, the unwavering optimism was
led by immediate/ surprise ceasefire announced between Pakistan and India with
mediation from United States on Saturday, May 10, 2025.
Along with this, approval of the first review of EFF program
by IMF, unlocking US$1 billion tranche also boosted investors’ confidence.
Amidst Indo Pak turmoil starting from April 22, 2025 incident
in Pahalgam, Kashmir, and the market had lost 12.5% in subsequent 12 sessions
before recovering 3.5% on May 09, 2025.
The geopolitical tensions also clouded various positive
developments of Pakistan market and economy including all time low inflation
reading at 0.3%YoY, for April 2025 scheduling of Pakistan’s first review of EFF
on IMF board meeting agenda for May 09, 2025 and a surprise cut of 100bps in
policy rate to 11% by central bank of Pakistan.
Trading at PSX was halted within 5 mints of its opening,
after the benchmark Index opened 9.26% positive. Based on exchange rule,
trading is halted for an hour, if the benchmark index moves 5% in either
direction and remains in that territory for five consecutive mints.
PSX witnessed trading value of PKR30.4 billion in ready
market, up 5.3% higher than previous day.
Surprisingly, at the upper circuit, investor bids totaled PKR13
billion in both ready and future market, with the majority of interest seen in
PPL, MLCF and PSO.
According to the brokerage house, local individual investors
who had been net sellers in the recent past were aggressive buyers during the
session directly and through local mutual funds.
Pakistan’s dollar denominated bonds maturing in 2025 and
2026 increased by 1.2% and 2.0%, respectively.
Similarly, yields on the 2025 and 2026 bonds have decreased
to 9.93% and 10.19%, down from 13.27% and 12.56% on Friday.
Local bonds also posted a positive trend, with the 3-year
bond yield falling by 8bps, while the 5-year yield also declined by 15bps.
According to annual strategy released in November 2024,
Topline Securities had mentioned, approval of first review of IMF in March 2025
would be a key trigger in re-rating of market multiple to historic average.
The brokerage house maintains its base case Index Target of
127,000 for December 2025. However, with higher liquidity, index can cross
150,000 mark assuming successful IMF reviews and political/ geopolitical
stability.
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