Shares at PSX climb 500 points on ‘significant progress’ on new IMF loan
Bulls dominated the trading floor at the Pakistan Stock Exchange (PSX) as stocks climbed 500 points on Friday after the International Monetary Fund (IMF) said it and Pakistan made significant progress on a new loan.
After the opening bell, the benchmark KSE-100 climbed 565.74 points, or 0.75 per cent, to stand at 75,680.21 points from the previous close of 75,114.47 at 10:30am.
Mohammed Sohail, chief executive of Topline Securities, highlighted that the “stocks went up 500 points” after an IMF mission said the global lender and Pakistan had made “significant progress” towards reaching a Staff-Level Agreement (SLA).
Moreover, he said that the United Arab Emirate’s pledge to invest $10 billion along with reports of Pakistan selling its stake in Reko Diq to Saudi Arabia also supported “market positive sentiments”.
Raza Jafri, chief executive of EFG Hermes Pakistan, also highlighted that the KSE-100 was “reacting positively” to the UAE’s investment commitment.
“Growing comfort on the external account increases the chances of interest rate cuts commencing from the next monetary policy, which can further rerate the market,” he added.
Awais Ashraf, director of research at Akseer Research, echoed the same sentiments. He said that the $10 billion investment vow and the “favourable statement” by the IMF mission “bolstered investor confidence”.
“This sentiment is reflected in the positive trends observed in the majority of companies listed on the stock exchange,” Ashraf noted.
Furthermore, he said, “The IMF’s new programme emphasises securing the viability of the energy sector through reforms aimed at reducing high energy costs.
“Additionally, the programme focuses on maintaining low and stable inflation through appropriate monetary and exchange rate policies. Consequently, energy and financial sector companies are likely to be well-positioned, while cyclical sectors may continue to face challenges.”
