KSE-100 up over 600 points as market upbeat over AIIB inflow

Positive sentiment prevailed at the Pakistan Stock Exchange (PSX), following the announcement of inflows from a multilateral institution, driving the benchmark KSE-100 Index over 600 points during trading on Thursday.

The KSE-100 Index closed the session with an increase of 635.91 points or 1.55% to settle at 42,901.27.

Trading began with a jump and the market maintained the rise for the rest of the day. The trend turned range-bound in final hours and the index closed on a positive note.

All index-heavy sectors including automobile, cement, banks, fertiliser and oil closed with massive gains.

Across-the-board positive sentiment was witnessed during trading, which comes following Finance Minister Ishaq Dar’s announcement on Wednesday that Pakistan will receive $500 million as co-financing for the BRACE (Building Resilience with Active Counteryclical Expenditures) development program from the Asian Infrastructure Investment Bank (AIIB).

“These funds will be received by State Bank of Pakistan within November 2022,” Dar said on his Twitter account.

Experts said the announcement has added to market confidence, as the development would boost Pakistan’s reserves’ position, which is critical for the country that has been desperately seeking dollar inflows to meet its balance-of-payments needs.

“The announcement of AIIB funding is one of the factors driving the positive sentiment in the market,” Sana Tawfik, vice-president research and a senior analyst at Arif Habib Limited (AHL), told Business Recorder.

“If these inflows are materialised and the current account deficit shrinks, this would translate into a sustained positive momentum for the market,” she said.

However, political concerns remain, said the analyst, as the Pakistan Tehreek-e-Insaf (PTI) was expected to resume its long march from today (Thursday).

Meanwhile, in another key development, the federal government decided to withdraw the State Bank of Pakistan (SBP) and the National Bank of Pakistan (NBP)’s appeals from the Supreme Court against the Shariat court with respect to making the economy interest-free in the next five years.

“The Islamic banking sector, especially Meezan Bank and Faysal Bank, are reacting positively to this development,” said Tawfik.