Bullish momentum dominated the Pakistan Stock Exchange (PSX) on Monday, with the KSE-100 index rising by 500 points ahead of the central bank’s Monetary Policy Committee (MPC) meeting on January 27. The index gained 817.68 points, or 0.71%, reaching 116,089.76 points before closing at 115,844.81, up by 572.73 points (0.5%) from the previous session.
Mohammed Sohail, CEO of Topline Securities, attributed the positive trend to signs of political stability and expectations of another rate cut, which helped boost investor sentiment. Awais Ashraf, director of research at AKD Securities, noted that the resolution of political uncertainty after a recent court verdict has strengthened investor confidence. He also pointed out that investors were optimistic about the economic outlook and anticipating a potential reduction in the policy rate during the upcoming MPC meeting.
Ashraf highlighted a surge in account openings at the Pakistan Stock Exchange in recent months, signaling growing trust in the improving economic conditions. This optimism was also reflected in record individual buying activity, with $22.1 million in purchases this month.
The State Bank of Pakistan’s MPC meeting on January 27 will decide the key interest rate. A survey by Topline Securities revealed that 61% of participants expect a 100 basis point rate cut, with others predicting cuts of 150bps or 200bps. Despite previous rate cuts, high real interest rates are still a concern, especially with inflation for January 2025 expected at around 3.5%.
