How did the market perform in April 2024?

In April 2024, the Karachi Stock Exchange 100 (KSE100) Index saw significant gains, climbing by 6.1% Month-on-Month (MoM), equivalent to 4,097 points. This increase surpassed the 3.8% MoM growth observed in March 2024. The market experienced positive momentum driven by various developments and market sentiments.

Key Highlights

• Market Performance: The local bourse surged during April’24, fueled by receding inflation expectations and positive market reactions to notable events. These included the visit of a Saudi delegation, finalization of a US$3.0bn IMF Stand-by Arrangement, and prospects of a larger Extended Fund Facility (EFF).
• Monetary Policy Committee (MPC) Decision: There was anticipation and mixed expectations surrounding the MPC’s decision on the policy rate. The central bank ultimately opted to maintain the status quo, signaling a cautious approach amid ongoing geopolitical events and discussions related to the new EFF program.
• Current Account Surplus: Pakistan recorded its largest current account surplus in nine years in March 2024, amounting to US$619 million. This contributed to a significant reduction in the nine-month deficit to US$508 million, down 88% year-on-year (YoY).
• Sector Performance: The Fertilizer sector emerged as the best performer in April’24, posting a return of approximately 12.23% MoM. This was driven by expectations of uninterrupted gas supply to Urea producers and improving sector fundamentals.

Sectoral Performance

The Fertilizer sector led the market gains, followed by Synthetic & Rayon, Pharmaceuticals, Sugar & Allied, and ETFs. Conversely, the Tobacco, Transport, and Miscellaneous sectors experienced declines during the period.

Top performers

• Top Performers:
• Fertilizers: ~12.23% MoM
• Synthetic & Rayon: ~12.19% MoM
• Pharmaceuticals: ~11.9% MoM
• Sugar & Allied: ~11.7% MoM
• ETFs: ~10.4% MoM

Top Decliners

• Decliners:
• Tobacco: -17.2% MoM
• Transport: -11.3% MoM
• Miscellaneous: -10.9% MoM

Investment Perspective

The State Bank of Pakistan (SBP) is maintaining real rates at around 5% as of April’24 to anchor inflation expectations. However, the trajectory of the anticipated easing cycle will depend on stabilizing the external account, primarily through IMF oversight.

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The market’s future direction is anticipated to be influenced by:

• Revenue measures in the upcoming Federal Budget.
• Potential revisions in electricity and gas tariffs during the summer months, which could impact inflation figures.

Source: AKD Research

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →

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