PSX steady, political hype causes slight decline

KARACHI: The Pakistan Stock Exchange (PSX) remained largely unchanged over the past week, registering a slight decline despite achieving a record high mid-week. On Monday, the index opens at 85,250.09 points amidst hopes of stability.

Earlier in the outgoing week, investor sentiment was dampened during, driven by escalating political unrest following protest calls from the opposition party Pakistan Tehreek-e-Insaf (PTI). However, optimism returned with the peaceful conclusion of the 26th Shanghai Cooperation Organisation (SCO) summit, which raised hopes for improved regional political and economic stability. This helped push the index past the 86,000 mark on Wednesday.

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Market analysts also attributed the to the government’s announcement to release outstanding payments to five independent power producers (IPPs) from the 1994 policy. Additionally, four “take-and-pay” options were proposed to 18 IPPs operating under the 2002 power generation policies. However, the index was unable to maintain its position above 86,000.

In a more positive development, the State Bank of Pakistan’s foreign exchange reserves crossed $11 billion, the highest level in nearly three years, with an addition of $215 million in the week ending October 11. However, the rupee remained steady, slipping by just two paisas to Rs 277.6, as the central bank did not disclose the source of the fresh inflows.

On the other hand, the market faced pressures as Pakistan’s trade deficit expanded by 24 per cent year-on-year to $1.8 billion in September. Meanwhile, the recent PIB auction saw a sharp drop in yields, with the two-year bond recording a significant 74 basis point decline.

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By the close of the week, the KSE-100 index settled at 85,250 points, down 233.3 points, or 0.27 per cent, on a weekly basis.

Foreign investors continued their selling trend, offloading $11.6 million in shares, compared to a net outflow of $22.6 million in the previous week.