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KARACHI: Pakistan’s benchmark share index on Tuesday breached 60,000 to trade at an all-time high of 60,500.61 points, data on the Pakistan Stock Exchange website showed.
Investors expect an imminent cut in the central bank’s policy interest rate, currently set at a record high 22%.
Inflation appears to have peaked, having slowed to 26.9% year-on-year in October.
Despite Pakistan’s political and economic difficulties, the index has gained more than 48% this year, after the International Monetary Fund (IMF) approved a $3 billion loan programme in July to avert a sovereign debt default.
Some analysts believe the market is welcoming a successful staff level agreement for the second tranche of funds under the current IMF Standby Arrangement, along with a expected disbursement of the funds in December and other foreign exchange inflow from multilateral institutions.
“Despite the fact that the market is trading at an all-time high, the valuation of the market is still attractive as KSE100 index is currently trading at price-to-earnings multiple of 4.5 times as compared to the last 5-years average PE multiple of 6 times,” said Tahir Abbas, head of research at Arif Habib Limited.
Companies’ strong profitability and dividend payouts are also enticing investors confidence, he added.
Investors expect an imminent cut in the central bank’s policy interest rate, currently set at a record high 22%.
Inflation appears to have peaked, having slowed to 26.9% year-on-year in October.
Despite Pakistan’s political and economic difficulties, the index has gained more than 48% this year, after the International Monetary Fund (IMF) approved a $3 billion loan programme in July to avert a sovereign debt default.
Some analysts believe the market is welcoming a successful staff level agreement for the second tranche of funds under the current IMF Standby Arrangement, along with a expected disbursement of the funds in December and other foreign exchange inflow from multilateral institutions.
“Despite the fact that the market is trading at an all-time high, the valuation of the market is still attractive as KSE100 index is currently trading at price-to-earnings multiple of 4.5 times as compared to the last 5-years average PE multiple of 6 times,” said Tahir Abbas, head of research at Arif Habib Limited.
Companies’ strong profitability and dividend payouts are also enticing investors confidence, he added.
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