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Shares at the Pakistan Stock Exchange traded in the green for a second consecutive session on Friday after the International Monetary Fund’s (IMF) Executive Board successfully concluded the first review of Pakistan’s economic reform programme.
According to the PSX website, the KSE-100 index gained 565.79, or 0.88 per cent, at 10:56am to stand at 65,183.35 from the previous close of 64,617.56.
Mohammed Sohail, chief executive of Topline Securities, credited the bullish momentum to the IMF board meeting, adding that the “hint in their statement on lower inflation” bolstered positive sentiments today.
Raza Jafri, head of equities at Intermarket Securities, too credited the rally to the IMF board’s approval. He added that the IMF estimated June’s inflation data to ease down to 18.5pc which had increased expectations of monetary easing going forward.
This, coupled with emerging political clarity, helped sustain the rally, Jafri said.
Faran Rizvi, head of equity sales at JS Global, echoed the same sentiments. “The long-awaited approval news from the IMF board for the next tranche has finally arrived, satisfying the market’s anticipation,” he said.
He noted the index showed “potential for reaching a new high around 70,000, providing optimism for investors”.
However, he cautioned that the current crisis in the Middle East remained a significant factor that could impact oil price stability, posing concern for the economic outlook of the country.
A day earlier, the IMF board had completed its first review of Pakistan’s economic reform programme supported by a $3 billion Stand-By Arrangement (SBA) and allowed the immediate disbursement of $700 million.
This latest disbursement will bring the cumulative total under the arrangement to an impressive $1.9 billion. The financial support provided by the IMF propels global confidence in Pakistan’s commitment to implementing economic reforms.
“Economic activity has stabilised in Pakistan, although the outlook remains challenging and dependent on the implementation of sound policies,” the IMF board observed.
It also said that “continued timely and consistent implementation of programme policies remains critical, with no room for slippage”.
The board reminded Pakistan that it “requires strict adherence to fiscal targets while protecting social spending, a market-determined exchange rate to absorb external shocks, and further progress on structural reforms to support stronger and more inclusive growth”.
More to follow
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