The stock market continued to rise on Friday, supported by strong expectations to reduce interest rates at the next meeting of the monetary policy and foreign purchases committee, especially in the cement sector.
Market morale has received an additional batch of positive developments, including a billion dollar loan obtained from banks in the Middle East and an increase in optimism about a strong season of companies’ profits, which increased the momentum of recovery.
The standard KSE-100 index on the Pakistan Stock Exchange (PSX) rose 842.69 points or 0.74% to close at 114880.48 after scoring its highest level during the day at 115779.05 points.
“Expectations increased by reducing interest rates on Monday after the revenue decreased yesterday. This, along with a new loan of one billion dollars from the Middle East banks and foreigners’ purchases, especially in the cement sector, helps the market to recover.” Ismail Iqbal, CEO of Securities, said the reward of Mustafa.
He added that the continuous results season also motivated the purchase activity, as investors expect profit ads.
On Wednesday, the government collected 326 billion rupees through the Treasury auction, although it was less than the target of 350 billion rupees. The return on treasury bills decreased by 20-41 basis points, which strengthened expectations by reducing the interest rate by 100 basis points in the Australian Reserve Bank, scheduled to be announced on Monday, January 27.
It is expected that inflation in Pakistan will continue in its landfill, with the possibility of the consumer price index for the month of January to 2.8% – the lowest level since November 2015. According to JS Global, this decrease is significantly due to the high basic impact despite the modest inflation. . A monthly increase of 0.6%.
It is expected that the average inflation during the first seven months of the fiscal year will reach 2025 to 6.7%, which is much lower than 28.7% registered in the same period last year.
Meanwhile, Pakistan’s foreign exchange reserves retained by the Pakistani State Bank (SBP) decreased by $ 276 million to $ 11.449 billion in the week ending January 17, due to the payment of external debt. Reserves are still sufficient to cover imports for more than two months.
However, the pressure on the reserves was afraid last week when the United Arab Emirates confirmed the renewal of deposits of two billion dollars for another year.
On Thursday, Prime Minister Shahbaz Sharif welcomed the World Bank of the Qatari partnership framework for billions of dollars, which extends from the 26th fiscal year to the 35th fiscal year. He described it as “in a timely manner” to address the economic challenges, poverty and climate facing Pakistan. This initiative is expected to support vital development projects throughout the country.
In addition, the decision of the United Arab Emirates to renew the deposits and efforts made by the government to secure short -term loans from the Middle East banks have provided a financial mitigation that was an urgent need for it.
Finance Minister Mohamed Orenquet recently confirmed a billion -dollar loan agreement with two institutions in the Middle East at interest rates ranging from 6% and 7%. The loans were short -term – or reaching one year.
The shares also flourished on Thursday, when the Kuwait Stock Exchange index rose by 100 by 594 points, reflecting the optimism of investors about more cash facilitation this month. The index closed at 114037.79 points, up 0.52% from the closure of the previous session of 113443.43 points.
SBP’s next monetary policy announcement remains a pivotal point for the market participants. Investors are optimistic about more monetary facilitation, supported by low inflation and low returns.
The Monetary Policy Committee meeting will be held on Monday 27 January. Later, on the same day, the Governor of the Central Bank of Sudan, Jamil Ahmed, will announce the decision of monetary policy in the press.
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