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The benchmark index Pakistan Stock Exchange may have gained just 475 points yesterday. But make no mistake, trading pits at the bourse are brimming with excitement because the last few days have seen a series of good news, leading some to hope for 50,000 points by the end of CY20.

Yesterday’s volume itself is a tell-tale sign of the changing mood at the bourse; threats of a spiraling abyss have been left behind. After the ease in inflation reported earlier this month, the downward movement in PIB cut-off yields witnessed this week has raised hopes for equities.

There are now heightened expectations of a rate cut – and if market chatter (read: rumour) is any guide - then perhaps even as early as March 13, even though the central bank has not announced the date for monetary policy as yet. Meanwhile, the partial outflow of the so-called hot money without any visible impact on exchange rate has also helped allay latent fears.

All eyes are now set on detailed export numbers and the large-scale manufacturing numbers. Those numbers may be better, relative to last year. But one oft-forgotten aspect is that it’s one thing to have growth stemming from low base affect, and another to achieve it through conscious policy decisions.

The source and pace of GDP growth – and not mere recovery - remains a moot point. Usually bullish markets come in tandem with substantial rebound in investments, evidence of which is not on the horizon. Not as yet! Improvements in indicators, sure. But growth driving policies, nay. There are lots of announcement and action on welfare delivery by the state, but not much on the growth side. This at a time when fiscal threats still loom large, and the tax man to whom a lot of hopes were pinned is out of the picture due to whichever reason one ascribes to.

The NCCPL may be the clearing house for the PSX, but the PSX as market is itself a clearing house of countless nuanced but often contradicting sets of perceptions, misperception, information, misinformation, signals, noise and music that translate into investment decisions. Separating noise from music and right perception from wrong will be one of the trickiest jobs for investors until at least the budget is announced. Happy hunting!