Stock Market Surge Fueled by Remittances and Forex Optimism

The stock market commenced the week with significant momentum, driven by record-breaking remittance figures and increasing confidence in foreign exchange reserves as the fiscal year draws to a close.

According to Amreen Soorani, Head of Research at Al Meezan Investment, equity market participants are reacting favorably to recent announcements from the State Bank of Pakistan (SBP) Governor. These include expectations of record remittances reaching $4 billion, the potential for a current account surplus in FY25, and SBP reserves projected to exceed $14 billion by June, bolstered by $5 billion in new inflows.

She further noted that this development strengthens Pakistan’s external financial standing, particularly within the framework of the IMF program, and indicates enhanced stability in currency and inflation – factors crucial for bolstering investor confidence.

During early trading, the Pakistan Stock Exchange’s (PSX) KSE-100 Index reached an intraday peak of 116,177.18 points, marking an increase of 1,323.85 points, or 1.15%, compared to the previous day’s close of 114,853.33.

The session’s lowest point was recorded at 115,246.20 points, still reflecting a gain of 392.87 points, or 0.34%.

Investor sentiment has been further buoyed by encouraging statements from the State Bank of Pakistan (SBP) Governor, who projected that foreign exchange reserves could surpass $14 billion by June 2025. This anticipated improvement is attributed to record monthly remittances of $4.1 billion in March and expected inflows of $4-5 billion before June.

The SBP has indicated that Pakistan’s external debt repayment obligations amount to $26 billion. Of this, approximately $16 billion, including $12.4 billion, is expected to be rolled over or refinanced, while $8 billion has already been repaid, alleviating immediate pressures on the external account.

This positive market opening follows a volatile session on Friday, during which the benchmark index experienced a sharp decline of 1,335.88 points, or 1.15%, closing at 114,853.33 amid widespread concerns regarding global trade tensions and uncertainty in domestic policy.