Despite rally, KSE-100 Index shows $4bn decline in Market Cap

July 12, 2023 (MLN): The positive news flow in recent days has sparked investors' confidence as the KSE-100 has been on a roll. However, despite the index's impressive performance, there are concerns over the market's overall health.

In Tuesday's trading session, KSE-100 breached the psychological level of 45,000 points.

The last time the KSE-100 index crossed the 45,000 mark was over a year ago on April 28, 2022.

During that period, the market capitalization of the KSE-100 index stood at Rs1.8 trillion and $9.7 billion.

In contrast, the current market capitalization is recorded at Rs1.609tr, while in dollar terms it stands at $5.78bn, representing a significant decline of 40.5%.

Although the recent surge in the KSE-100 index is undoubtedly a positive development, the disparity between the market capitalization in PKR and USD highlights the vulnerability of the Pakistani stock market to currency fluctuations and external factors.

To note, the benchmark KSE-100 index has gained a staggering 3,703.11pts in just the last seven trading sessions, since the signing of the long-standing staff-level agreement with the IMF on a $3 billion nine-month SBA.

Moreover, the State Bank of Pakistan (SBP) received a $2bn deposit from Saudi Arabia yesterday.

On Monday, Fitch Ratings upgraded Pakistan's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'CCC' from 'CCC-'.

KSE-100 Daily time-frame chart

Copyright Mettis Link News