On Monday, the Pakistan Stock Exchange (PSX) saw a rise in stock prices of almost 300 points due to anticipation of a new agreement with the International Monetary Fund (IMF).
At 11:15 am, the benchmark KSE-100 index increased by 704.08 points, or 0.9%, from its previous closing of 78,444.96 points to 79,149.04. At 78,824.33, the index finally closed, up 379.37, or 0.48 percent, from the previous closing.
Investors were “building new positions amid expectations of lower CPI (Consumer Price Index) reading,” according to Topline Securities CEO Mohammed Sohail.
Furthermore, he stated that the staff-level agreement (SLA) for the International Monetary Fund (IMF) “will be reached soon after passing of tax-laden budget.”
“Bullish sentiment prevails at PSX as the Finance Bill’s approval fuels optimism for an IMF deal,” stated Amreen Soorani, head of research at JS Global.
“In comparison to global peers, Pakistan’s attractive valuations—trading at just 4x multiples despite a near 90pc gain over the past year—further entice investors,” she continued.
The approval of the FY25 budget, according to Raza Jafri, CEO of EFG Hermes Pakistan, was seen favorably by investors and was a “big step towards securing an IMF programme.”
Additionally, the inflation report is due, and rate reductions are anticipated in the upcoming monetary policy. Local flows into equities are still being drawn by these causes, he continued.
The upward trend was ascribed by Chase Securities’ director of research Yousuf M. Farooq to the “passing of the budget, [which] should lead to Pakistan getting into its next IMF program.”
He went on, “A new IMF program would lead to external stability and a check on Pakistan’s fiscal account.”
In addition, he stated that “a gradual downward trend in interest rates and an upward trend in the market’s re-rating should also result from future lower inflation.”
The same thoughts were expressed by Awais Ashraf, director of research at AKD Securities.
“Building investor confidence has been aided by the approval of the budget in line with the IMF requirements, as the odds of receiving a new bailout package have improved,” he stated.
