Shares at PSX climb 1,000 points ahead of MPC meeting

Bulls retained control of the trading floor on Monday as shares at the Pakistan Stock Exchange (PSX) climbed 1,000 points in anticipation of Monetary Policy Committee (MPC) meeting, scheduled for later today.
The benchmark KSE-100 index climbed 1,041.88, or 1.15 per cent, to stand at 91,901.73 points from the previous close of 90,859.85 points at 11:20am. Finally, the index closed at 91,938.00 points, up by 1078.15 or 1.19pc, from the previous close.
Sana Tawfik, head of research at Arif Habib Limited, noted that the positive sentiment was due to the “anticipation of rate cut today” and improving macroeconomic indicators such as inflation numbers for October at 7.2pc.
She noted that exploration and production sectors (E&Ps) were “performing because their latest financials show improved receivable collection numbers”.
Yousuf M. Farooq, director research at Chase Securities, also attributed the bullish momentum to “rate cut anticipation, low trade deficit, lower inflation by December and conversion from fixed income funds”.
Awais Ashraf, director research at AKD Securities, said, “Investor enthusiasm is building in anticipation of a policy rate cut in today’s Monetary Policy Committee meeting and record high exports achieved in October.”
“Additionally, signs of improvement in the balance sheets of companies affected by circular debt for the first time in four years have further uplifted market sentiment,” he highlighted, adding that stocks poised to benefit from monetary easing and structural reforms are expected to outperform others.
The State Bank of Pakistan’s MPC meeting will convene today to deliberate interest rates, the policy is of great interest to the stakeholders of the economy as a significant cut in the rate is exp­ected.
Most analysts believe that the central will reduce its policy rate by 200 basis points in its upcoming meeting on November 4, marking the fourth consecutive cut since June, thanks to a decline in inflation, a low current account deficit and higher remittances.