PSX Stocks Rally After Supreme Court’s Decision on No-Confidence Motion

The Pakistan Stock Exchange (PSX) rallied in the week’s last trading session as the bulls took control over the market.

After opening trade at 43,786.83 points, the market showcased bullish sentiments, with the benchmark KSE-100 index gaining 657.75 points after rising to a high of 44,501.55 points during

At the end of the day, the KSE 100 index closed at the 44,444.58 level, up by 657 points or 1.50 percent.

Analysts believe that the Supreme Court’s ruling, as well as the State Bank of Pakistan’s (SBP) increase in interest rates, worked as positive precursors for investors.

Around 227.69 million shares were traded at the exchange, with 238 of the 333 active scrips advancing in value, only 76 declining and 19 remaining unchanged.

On Thursday, the Supreme Court overturned the ruling of National Assembly Deputy Speaker Qasim Suri, restoring the National Assembly to its position of April 3, and declaring Prime Minister Imran Khan’s advice to the president to dissolve the Assembly unconstitutional and without legal effect. With effect, this immediately added more confidence among investors and compelled the market to report gains.

Likewise, the State Bank of Pakistan’s Monetary Policy Committee (MPC) resolved on Thursday to raise the Bank’s policy rate by 250 basis points to 12.25 percent in order to address menaces to inflation and external stability.

The MPC meeting was set for April 19, 2022. However, given the state of the economy, the committee decided to convene early and make a policy rate decision.

JS Global’s Assistant Vice President, Muhammad Waqas Ghani, told ProPakistani that:

The market reacted positively today over clarity on the political front after the Supreme Court’s decision and increase in interest rate by the State Bank of Pakistan (SBP). SBP in an emergency meeting raised policy rate by 250bps yesterday to bring certainty to an otherwise volatile money market. Two additional monetary adjustments including enhancing the item list for 100% cash margin requirement and increasing the Export Refinance Scheme rate from 3% to 5.5% were also announced. Going forward, trend will depend mainly on key macro prints.

Aside from a policy rate rise, the SBP’s import restriction measures were also implemented at the appropriate moment. To relieve pressure on the currency rate, the SBP imposed a 100 percent cash margin on the import of 177 products with immediate effect on Thursday.

The benchmark KSE 100 index was driven up by the banking sector (+318.40 points), the oil and gas exploration industry (+83.74 points), and the cement sector (+47.77 points). Banking players Meezan Bank Limited (+MEBL 81.25 points), United Bank Limited (UBL +58.71 points), and MCB Bank Limited (+MCB 46.01 points) contributed the most points.

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