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Bulls take charge on PSX after Pakistan clinches IMF deal

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KARACHI: Pakistan Stock Exchange (PSX) Monday witnessed a bullish trend as the KSE-100 benchmark index crossed 2,000 points after the government reached a consensus with the International Monetary Fund (IMF) on a bailout package.

The index opened in the green zone and remained positive throughout the session before the trading was halted for an hour after the index hit its upper circuit limit of 5% at around 9:30am. The trading resumed at around 10:37pm.

When the market opened today, after Eid holidays break, it surged a record 2,231.1 points to 43,683.78 points, rising more than 5%, which forced the suspension.

As the trading resumed after an hour’s suspension, the benchmark index surged to 43,923.71 points — an increase of 5.96% or 2471.03 points — at around 11:20am.

Pakistan secured a badly-needed $3 billion short-term financial package — subject to approval by the IMF board in mid-July — on Friday, giving the South Asian economy a much-awaited respite as it teeters on the brink of default.

Speaking to Geo.tv, Pakistan-Kuwait Head of Research Samiullah Tariq said the market is performing due to the IMF deal and the reduction of the uncertainty on the balance of payments front.

The loan is a lifeline for Pakistan as it gives a nine-month roadmap to the nation, which is facing one of its worst economic and political crises on record.

Ecohing Tariq, Arif Habib Limited’s Head of Research Tahir Abbas also said that the rally is primarily due to the staff-level agreement with the IMF.

When asked whether the rally would be short-lived, Abbas said: “No, the momentum and sentiment are very positive given now the country has an economic roadmap ahead for the next nine months.”

The KSE-100 index had become the world’s cheapest equity benchmark, according to Bloomberg, as concerns regarding political turmoil and a risk of default had sent investors fleeing.

Islamabad also faces a payment of $23 billion in external debt obligations during the fiscal year, which started in July — and is almost six times more than the State Bank of Pakistan’s $4 billion forex reserves.

PM felicitates business community

In response to the surge, Prime Minister Shehbaz Sharif felicitated the business community and the nation.

He said as a result of a staff-level agreement with the IMF, the trust of investors and the business community was rapidly reviving.

In a statement issued by the PM Office, Shehbaz said the government’s continued struggle and prudent policies had started bearing fruits as signs of the country’s economic revival were rising.

“We are resuming the journey of economic development and decline in the inflation rate from the point where Quaid Muhammad Nawaz Sharif had left.” he said.

“Thanks to God, the country has been put on the path of development again, he said adding that after severe disappointments, a new sun of hope is rising again.”

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With a loss of 32 paisas, the US dollar is now trading at 277 rupees on the interbank market.

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In the Interbank market, the United States dollar is currently trading at 277 rupees and 63 paise, indicating a depreciation of 32 paise. Yesterday, it reached a closing price of 277 rupees and 95 paise on the Interbank market.

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The price of gold has skyrocketed in Pakistan.

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Pakistan’s gold price recovered on Friday following a sharp drop the day before, mirroring worldwide market patterns.

According to data released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of 24-karat gold per tola rose by Rs2,000 in the local market, ending at Rs278,800.

Likewise, the cost of 10 grams of 24-karat gold increased by Rs1,715 to Rs239,026.

With an extra $20 premium, the price of gold increased by $21 on Friday to $2,683 per ounce on the global market as well.

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The PSX-100 index reaches a record high and surpasses 93,000 points.

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Historically, the Pakistan Stock Exchange (PSX) exceeded the 93,000-point threshold for the first time, with the KSE-100 index increasing by 480 points to attain a record high of 93,001 points.

A significant milestone was reached on the final business day of the week, establishing a new record for the nation’s stock market.

Economists ascribe the market’s expansion to expectations of an enhanced economic rating for Pakistan and a favorable perspective on economic reforms. The session commenced positively, with the 100 index initially increasing by 250 points, reaching 92,770 points prior to the day’s zenith. The market concluded the prior day at 92,520 points.

Simultaneously, the Pakistani rupee appreciated as the dollar decreased by 20 paisa in the interbank market, now valued at 277.75 rupees. Economists attribute this enhancement to heightened remittances and a current account surplus, which have strengthened the rupee’s status.

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