Bulls return to PSX after IMF greenlights govt’s circular debt plan

The bulls returned to the Pakistan Stock Exchange on Wednesday after the International Monetary Fund (IMF) approved the government’s plans to reduce the circular debt balance.

The benchmark KSE-100 Index closed the day on a positive note with gain of 797.78 points or 1.68% to settle at 48,227.60.

Arif Habib Limited’s Head of Research Tahir Abbas stated that for the last two days, bears were dominating the market as there was “selling pressure”.

Abbas said that the “selling pressure” was there as the investors were busy in profit taking and there was uncertainty with regard to the caretaker prime minister and who will take over from Finance Minister Ishaq Dar in the interim setup.

“Apart from that, there were question marks on circular debt due to which we saw selling in two days. This has reversed today and the market saw positive momentum,” he added.

Another reason for the bulls’ domination of the marker as per the expert was the finalisation of a caretaker setup. “Apart from that there was news that the IMF has given the go-ahead on the circular debt resolution due to which we saw across-the-board positive momentum.”

On the other hand, capital market expert Saad Ali said that the market rejuvenated after yesterday’s correction following the new development related to the energy sector.

“There was news that the IMF has approved the government’s plans to reduce the circular debt balance in the gas chain through the dividends of state-owned E&Ps,” said Ali.

A day earlier, the Cabinet Committee on Energy (CCOE) approved the revised Circular Debt Management Plan (CDMP).

It has been envisaged under the revised the CDMP that the quarterly tariff adjustments and fuel adjustments would be charged from consumers in a timely manner after raising the baseline tariff. There would be no untargeted subsidy for any sector.