The Pakistan Stock Exchange (PSX) experienced an unprecedented surge on Friday, with the KSE-100 index soaring by 1,046 points. This remarkable rally catapulted the index to a historic high, crossing the 77,000-point threshold for the first time in the nation’s history. By 11 am on Friday, the KSE-100 index stood at 77,252.44 points, marking a 1.36% increase from the previous day’s close and showcasing the PSX’s continued upward momentum.
No Tax Hikes on Capital Gains and Dividends: Investors were buoyed by the federal budget for the fiscal year 2024-25, which did not introduce any new taxes on capital gains and dividend income. This decision has been a major factor in fostering a positive sentiment among investors, as it directly impacts their returns on investments.
Projections of Increased Dividends from SOEs: Expectations of substantial dividend increases from state-owned enterprises (SOEs) have further fueled investor optimism. The anticipation of higher payouts has made stocks more attractive, leading to increased buying activity.
The KSE-100 index’s performance has been nothing short of impressive, breaking several key thresholds in quick succession. On Thursday, the index closed above the 76,000-point milestone for the first time during intraday trading. This remarkable achievement saw the index climb by 3,410 points, surpassing the significant benchmarks of 73,000, 74,000, 75,000, and 76,000 points in a short span.
Mohammed Sohail, CEO of Topline Securities, attributed the upward trend to the absence of tax increases on dividends and capital gains in the new budget. He noted, “The decision to maintain the current tax rates on dividends and capital gains has been a significant positive for the market, boosting investor confidence.”
Investor sentiment has also been positively influenced by the finance minister’s remarks during the unveiling of the Economic Survey 2023-24. The minister highlighted constructive discussions with the International Monetary Fund (IMF) regarding a new loan program, which has further bolstered market confidence. The prospect of securing additional financial support from the IMF is seen as a stabilizing factor for the country’s economy, encouraging investors to increase their market participation.
The current bullish trend in the PSX reflects a broader optimism about Pakistan’s economic outlook. Market analysts predict that if the positive sentiment continues, the KSE-100 index could see further gains in the coming weeks. The combination of favorable fiscal policies, improved corporate earnings, and potential IMF support creates a conducive environment for sustained market growth.
