PSX limps to recovery as shares climb more than 100 points

Shares at the Pakistan Stock Exchange (PSX) continued to trade in the green on Friday as the index climbed more than 400 points in intraday trade.

The KSE-100 benchmark index climbed 446.50, or 0.57 per cent, to stand at 78,796.16 points from the previous close of 78,349.66 at 11:44am. However, the index failed to hold its position and closed at 78,488.21, up by 138.55 points or 0.18pc, from the previous close.

Mohammed Sohail, the chief executive of Topline Securities, said that the initial momentum in the market was due to expectations of Morgan Stanley Capital International (MSCI) — a provider of global indices for passive investments —“rebalancing inflows”.

Additionally, he said that the Consumer Price Index (CPI) data — which measures household inflation and includes statistics about price change for categories of household expenditure — will be released on Monday with the “market expecting August CPI near 10pc”.

Previously, Pakistan’s CPI in July rose 11.1 per cent year-on-year.

Meanwhile, Awais Ashraf, director research at AKD Securities, said that the bullish momentum was “strengthened following Moody’s rating upgrade”.

On Thursday, the index had rallied after a period of uncertainty due to Moody’s upgrading Pakistan’s rating to Caa2 and its outlook to “positive”. The rating agency had said its decision to upgrade was due to “Pakistan’s improving macroeconomic conditions and moderately better government liquidity and external positions, from very weak levels”.

Ashraf added that the trajectory was amplified by the “ECC’s approval of an incentive scheme to boost remittances, which eases concerns on external financing pressures”.

Earlier, the Economic Coordination Committee (ECC) of the cabinet had approved an attractive incentives package for banks and foreign exchange companies to enhance home remittances through official channels.