PSX Gains 1,762 Points Amid IMF Compliance & MSCI Review
Pakistan Stock Market Recovers with Strong Gains
The Pakistan Stock Exchange (PSX) closed the week on a positive note, with the KSE-100 index gaining 1,762 points, or 1.6% week-on-week, settling at 112,085. The surge was fueled by improved investor sentiment as Pakistan met three out of five key fiscal conditions set by the International Monetary Fund (IMF) for the first review of its $7 billion program. Furthermore, changes in the MSCI global indices, where Pakistan’s weight in the Frontier Market (FM) Standard Index was revised to 5.89%, also contributed to market confidence.
Key Economic Indicators and Market Highlights
1. Auto Sales Surge
Auto sales witnessed an impressive 65% month-on-month (MoM) increase, reaching 17,010 units in January 2025.
2. Remittances Growth
Pakistan’s remittances surged 25% year-on-year (YoY), reaching $3 billion for January 2025.
3. Foreign Exchange Reserves Decline
The State Bank of Pakistan’s (SBP) foreign exchange reserves recorded a drop of $252 million, settling at $11.2 billion.
4. PIB Auction & Government Borrowing
In a Pakistan Investment Bond (PIB) auction, the government raised Rs454 billion, surpassing its target of Rs350 billion. The cut-off yields declined by 1 to 25 basis points across various tenors.
5. Diplomatic & IMF Developments
- Turkish President’s Visit: Strengthened bilateral ties and set a $5 billion trade target.
- IMF Delegation’s Visit: Conducted a Governance and Corruption Diagnostic Assessment, meeting with the Auditor General and Federal Board of Revenue (FBR) to discuss audit transparency and tax digitalization.
Stock Market Performance Throughout the Week
Monday: Strong Rebound in Earnings Season Rally
The PSX witnessed a significant recovery on Monday, driven by optimism around the IMF’s fiscal targets. The KSE-100 index closed at 111,378, gaining 1,055 points.
Tuesday: Bullish Momentum Continues
The market remained bullish, fueled by strong economic data, particularly the 25% YoY surge in remittances. The index touched an intra-day high of 1,855 points, closing at 113,010, an overall increase of 1,632 points.
Wednesday: Market Volatility Amid External Concerns
A volatile session saw the index fluctuate throughout the day. Concerns over foreign debt repayments, the EU’s review of Pakistan’s GSP+ status, and rising political noise led to a slight dip of 85 points.
Thursday: Range-Bound Session Amid Mixed Sentiment
Despite a positive start, institutional profit-taking caused a 361-point drop, closing the index at 112,564.08.
Friday: Profit-Taking Drags Market Down
The third consecutive red session saw the index decline 478.78 points, settling at 112,085.30, primarily due to institutional profit-taking and global market jitters.
Sector-Wise Performance
Top Gaining Sectors
- Cement: +975 points
- Fertilizer: +532 points
- Power Generation & Distribution: +156 points
- Oil & Gas Marketing Companies: +145 points
- Miscellaneous: +106 points
Top Performing Stocks
- Lucky Cement: +856 points
- Fauji Fertilizer Company: +381 points
- Hubco: +206 points
- Mari Petroleum: +167 points
- Engro Fertilizers: +153 points
Foreign Investment & Trading Volumes
- Foreign investors remained net sellers, offloading $5.7 million worth of shares, particularly in cement and banking sectors.
- Trading activity surged, with average volumes rising 21% WoW to 525 million shares.
- Average traded value climbed 28.5% to $97.6 million.
Expert Analysis & Future Outlook
Arif Habib Limited (AHL) Report
According to AHL, Pakistan’s compliance with three out of five IMF fiscal conditions played a significant role in boosting market confidence. Additionally, Pakistan’s FM Standard Index weight of 5.89% in MSCI is expected to attract more foreign investment.
JS Global Insights
JS Global’s Deputy Head of Research, Muhammad Waqas Ghani, noted that the KSE-100 index showed strong recovery, while trading volumes jumped 21% WoW.
Pakistani Rupee Performance
The Pakistani rupee appreciated Rs0.16 against the US dollar, closing at Rs279.21, marking a 0.06% WoW increase.
FAQs About PSX and Market Performance
1. What factors contributed to PSX’s strong recovery this week?
The KSE-100 index gained 1,762 points due to IMF fiscal compliance, MSCI index adjustments, increased remittances, and robust auto sales.
2. How did remittances impact Pakistan’s stock market?
January remittances hit $3 billion, a 25% YoY increase, boosting investor confidence in economic stability and foreign exchange reserves.
3. Why did the market decline in the last three trading sessions?
Profit-taking, concerns over foreign debt repayments, EU’s GSP+ status review, and political uncertainties led to three consecutive red sessions.
4. What role did the IMF play in market movements this week?
IMF’s fiscal targets compliance reassured investors, signaling potential future financial stability, which drove market recovery.
5. What are the future prospects for PSX in the coming weeks?
With IMF negotiations ongoing, improved remittance flows, and stable macroeconomic indicators, PSX is expected to remain volatile but has long-term growth potential.
