PSX Rallies as Moody’s Upgrades Pakistan’s Credit Rating

The Pakistan Stock Exchange (PSX) saw positive market activity as investors reacted favorably to Moody’s Ratings’ upgrade of Pakistan’s credit rating. This surge propelled the benchmark KSE-100 Index past the 147,000 mark during Friday’s early trading hours.

As of 10:40 am, the KSE-100 Index stood at 147,486.35, reflecting an increase of 957.05 points, which is equivalent to a 0.65% rise.

Substantial buying activity was evident across vital sectors, including automobile manufacturers, commercial banking, fertilizer, oil and gas exploration, oil marketing companies, and the refinery industry. Major stocks like ARL, NRL, OGDC, POL, PPL, PSO, MCB, MEBL, and NBP all showed positive movement.

Factors Influencing the Market

Market analysts have linked the surge in buying to improved investor confidence following Moody’s upgrade on Wednesday of Pakistan’s local and foreign currency issuer ratings, along with its senior unsecured debt ratings, from Caa2 to Caa1.

Furthermore, the international ratings agency revised the rating for the senior unsecured MTN program from (P)Caa2 to (P)Caa1, while also adjusting Pakistan’s outlook from positive to stable.

Key business organizations within the country, such as the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the Businessmen Forum, and the North Karachi Association of Trade and Industry (NKATI), have welcomed Moody’s decision, citing its potential to greatly benefit Pakistan’s future economic prospects.

On the preceding Wednesday, the PSX experienced minor profit-taking as sellers dominated trading due to worries about the rising trade deficit and unmet IMF conditions regarding provincial tax collection.

Consequently, the KSE-100 Index concluded at 146,529.31 points, marking a decrease of 476.02 points or 0.32%.

The stock market remained closed on Thursday, August 14th, in observance of a public holiday.

Global Market Overview

Across the globe, Asian stock markets displayed mixed recovery trends. Higher-than-anticipated producer price inflation tempered expectations for a significant rate cut during the Federal Reserve’s September meeting, while US bonds and equity futures showed signs of stabilization.

MSCI’s broadest index of Asia-Pacific shares, excluding Japan, fell by 0.3% after the Bureau of Labor Statistics reported a 0.9% increase in the Producer Price Index for July, surpassing economists’ forecasts.

Currently, the market anticipates a 92.1% probability of a 25 basis point rate cut at the Federal Reserve’s September meeting, compared to a 100% likelihood observed on Thursday, according to the CME Group’s FedWatch tool. The possibility of a substantial 50 basis point cut has decreased to 0% from an earlier projection of 5.7% just a day prior.

Note: This information reflects an intra-day market update.