Bulls Return to PSX as KSE-100 Index Gains Over 3,200 Points

After two-days of record-breaking selloff, buying returned to the Pakistan Stock Exchange (PSX) on Friday as the benchmark KSE-100 index gained over 3,200 points.   Buying interest saw the KSE-100 index gain 3,238 points to close at 109,513 points, up 2.96 percent over the previous closing.   The index lost over 8,500 points on Wednesday and Thursday in a massive selloff spree. The KSE-100 went down by 3,790 points or 3.41 percent on Wednesday which was its worst-ever single day decline (in terms of points). However, Thursday saw more bloodbath as the KSE-100 lost 4,795 points or 4.51 percent.   A total of 740,044,257 shares were traded during the day as compared to 1,150,921,277 shares the previous day. The price of shares stood at Rs. 38.89 billion against Rs. 52.14 billion on the last trading day.     459 companies transacted their shares in the stock market today with 281 of them recording gains and 119 sustaining losses, whereas the share price of 59 companies remained unchanged.   In a report today, brokerage house Topline Securities highlighted that since September 2024, the Pakistani market has returned 35 percent in both rupee and US dollar terms due to the strong net inflows of Rs. 58 billion ($207 million) of local mutual funds during the period mainly due to conversion from fixed income to equities.    The report noted that funds/investors are converting from fixed income to equities as yields on fixed income instruments have fallen by 1253bps-1261bps from peak of 24.73 percent and 24.51 percent on 12M and 6M Treasury Bills in September 2023 to 12.20 percent and 11.9 percent on Dec 19, 2024.   Topline said that equities will remain the preferred choice for investors. Its rationale is that unlike previous years where investors use to buy dollars, real estate, gold, prize bonds etc. for earning higher returns, in this cycle equities will get some portion of liquidity due to (1) higher restrictions on purchase of dollars, (2) increase in taxations, compliance and FBR valuation rates of properties, and (3) discontinuation of high denomination unregistered prize bonds.