Shares at PSX climb 1,200 points in unabated rally

Bulls continued their stampede at the Pakistan Stock Exchange (PSX) on Friday as shares gained more than 1,200 points in an unabated rally.

The benchmark KSE-100 index climbed 1,274.55 points, or 1.27 per cent, to stand at 101,357.32 points from the last close of 100,082.77 at 4:38pm.

Awais Ashraf, director research at AKD Securities, said the KSE-100 index was “maintaining its upward momentum, driven by expectations of a substantial rate cut in the upcoming Monetary Policy Statement (MPS) scheduled for next month as the KIBOR [Karachi Interbank Offered Rate] and T-bill yields approach 13pc”.

The State Bank of Pakistan (SBP)’s Monetary Policy Committee is due to meet on December 16 to determine changes in the key interest rate.

Yesterday, the KSE-100 index crossed the 100,000 milestone for the first time, which analysts attributed to the new International Monetary Fund loan coupled with fiscal and monetary discipline improving investors’ sentiments.

They also noted a faster-than-expected fall in inflation and interest rates generating cash liquidity to the stock market.

Despite the gains, the market’s price-to-earnings ratio still traded at 5x compared to the historical average of 7x, according to Mohammed Sohail, chief executive of Topline Securities.

He noted there was a 20pc annual return in the rupee and a 13pc annual return in the greenback which stood as a “testament to resilience and potential” of the PSX.