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, said, “Pakistan stocks went up 500 points after the IMF said Pakistan [has] 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, said, “The KSE-100 is reacting positively to UAE’s pledge to invest $10bn in Pakistan.”
“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 a “$10 billion investment pledge from the UAE and a favorable statement by the IMF mission following their visit to Pakistan have bolstered investor confidence. This sentiment is reflected in the positive trends observed in the majority of companies listed on the stock exchange”.
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.”
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