SBP’s shift to monetary easing may spark Pakistan stocks surge

News Image

Abdur Rahman | February 28, 2024 at 05:27 PM GMT+05:00

0:00

February 28, 2024 (MLN): Pakistan’s already explosive stock rally may get another leg up as the central bank shifts its gears to monetary easing.

Investors widely expect the State Bank of Pakistan (SBP) to start unwinding this year after what has been the most aggressive fight against soaring inflation, as pressure now moderates.

Historical data shows start of a rate-cut cycle bodes really well for the local stock market.

Three months following the first rate cut, the benchmark KSE-100 index has averaged a 4.4% gain.

While over a six-month period, the index has increased 14.9% on average, data from the past six easing cycles compiled by Mettis Global shows.

Moreover, the gauge has advanced 19.1% on average a year after the initial cut, and a whopping 62.8% two years later.

Inflationary pressures have started to ease. February's CPI is expected to drop to a 17-month nadir.

The central bank's monetary easing is now a question of 'when', rather than 'if'.

The base case is a cut in the second half of 2024, although a few analysts expect the SBP to act as soon as March.

KSE-100 Performance After Start of Rate Cut Cycle
Date 1 Week 1 Month 2 Months 3 Months 6 Months 1 Year 2 Years
Jun-1997 0.77% 17.73% 22.13% 17.39% 11.02% -34.16% -32.87%
Jul-2001 -2.46% 0.50% -11.23% -2.99% 11.09% 40.10% 192.23%
Apr-2009 -5.16% -11.03% -10.14% -1.58% 25.58% 35.18% 52.20%
Aug-2011 -6.93% -9.65% -4.01% -5.65% -2.39% 18.96% 90.26%
Nov-2014 -0.66% -3.27% 6.57% 7.07% 4.22% 7.45% 33.76%
Mar-2020 -10.48% 7.94% 11.81% 11.85% 39.83% 47.04% 41.47%
Average -4.15% 0.37% 2.52% 4.35% 14.89% 19.10% 62.84%

This gain would be on top of a 22,251 points or 53.68% surge in the current fiscal year, since the International Monetary Fund (IMF)'s bailout program.


Disclaimer: The views and analysis in this article are the opinions of the author and are for informational purposes only. It is not intended to be financial or investment advice and should not be the basis for making financial decisions.

Copyright Mettis Link News

Related News

Name Price/Vol %Chg/NChg
KSE100 155,277.95
21.60M
0.54%
838.27
ALLSHR 95,114.73
93.63M
0.47%
446.57
KSE30 47,387.95
6.61M
0.57%
268.04
KMI30 226,918.53
13.78M
0.35%
792.81
KMIALLSHR 63,833.29
34.95M
0.42%
264.24
BKTi 41,819.07
3.02M
0.47%
196.25
OGTi 31,569.34
0.51M
0.26%
80.55
Symbol Bid/Ask High/Low
Name Last High/Low Chg/%Chg
BITCOIN FUTURES 116,420.00 116,690.00
115,160.00
-845.00
-0.72%
BRENT CRUDE 67.35 67.43
66.78
0.36
0.54%
RICHARDS BAY COAL MONTHLY 84.00 84.00
84.00
-1.90
-2.21%
ROTTERDAM COAL MONTHLY 93.00 93.25
92.75
0.00
0.00%
USD RBD PALM OLEIN 1,106.50 1,106.50
1,106.50
0.00
0.00%
CRUDE OIL - WTI 63.06 63.13
62.52
0.37
0.59%
SUGAR #11 WORLD 15.81 15.87
15.67
-0.01
-0.06%

Chart of the Day


Latest News
September 15, 2025 at 09:36 AM GMT+05:00

Asia markets mixed as Kospi hits record high


September 15, 2025 at 09:21 AM GMT+05:00

MG Morning Breeze: Updates to Skim before Market


September 14, 2025 at 07:11 AM GMT+05:00

Weekly Market Roundup



Top 5 things to watch in this week

Pakistan Stock Movers
Name Last Chg/%Chg
Name Last Chg/%Chg