Pakistan Stock Exchange's (PSX) benchmark KSE-100 index jumped past the 48,000 mark, a 24-month high, on Monday as analysts expect the positive sentiment to continue in the coming days.
Bulls took over the market after Pakistan's deal with the International Monetary Fund (IMF), and later, news on the country's mineral sector strengthened the gains further.
During the intra-day trade, the benchmark index increased by 1,010.72 points or 2.15% to reach 48,062.56 points, data showed, up from the previous close of 47,076.9 points — a 21-month high.
The market has gained more than 6,600 points (+15.9%) since Pakistan's staff-level agreement with the IMF for a $3 billion Standby Agreement.
Under the Special Investment Facilitation Council (SIFC), the government is also holding a Pakistan Mineral Summit regarding Reko Diq and other mines and mineral projects, beginning August 1, seeking foreign investment.
Speaking to private news channel, Pakistan-Kuwait Investment Company's Head of Research Samiullah Tariq attributed the expected investment in minerals as a "major" contributor to the market's rise.
"Major factor is optimism regarding investment in minerals; positive expectations of investment in other ventures/sectors as a spillover of investment in mining," he said.
Four leading Pakistani state-owned companies have also signed a memorandum of understanding (MoU) to collaborate on a $10 billion Greenfield Refinery project to be jointly developed with Saudi Aramco at the strategic Gwadar port in Balochistan.
Head of Equities at Intermarket Securities Raza Jafri told private news channel that today's run-up is broad-based, led by banks on strong results and valuation rerating, and by energy stocks on hopes of energy reforms and circular debt resolution.
He mentioned that the overall turnaround has come on the back of Pakistan securing the IMF SBA program, which has unlocked fresh financing from friendly countries and has given confidence to investors, including foreign funds.
"This remains a cheap market, with the potential to make new all-time highs provided risks are managed well," the analyst said, noting that today's rise takes returns in July to more than 15%, easily making it the best month in more than three years.
Alpha Beta Core CEO Khurram Schehzad said clarity on the political front was also boosting the investors' confidence — as the government will likely dissolve the assemblies before their tenure ends and hand over the reins to interim rulers.
"Political clarity, timely expected political transition, being on track with the IMF, a portion of the gas circular debt being paid, and some global leaders visiting Pakistan showing their investment interest are some of the reasons for stocks to continue momentum."
