Positive Momentum at Pakistan Stock Exchange (PSX) as Shares Climb 200 Points
The Pakistan Stock Exchange (PSX) experienced a bullish trend on Wednesday as shares gained over 200 points following a staff-level agreement between Pakistan and the International Monetary Fund (IMF). The KSE-100 index started the day on a positive note, climbing more than 400.04 points, or 0.61 per cent, to stand at 65,902.63 points from the previous close of 65,502.59. The index eventually closed at 65,731.79, up by 229.20 points from the previous close.
IMF Approval Boosts Investor Sentiment
Mohammed Sohail, Chief Executive of Topline Securities, attributed the upward trajectory to the “massive buying yesterday by the insurance sector” and highlighted that the IMF’s approval played a significant role in propelling sentiments. Earlier in the day, the IMF reached a staff-level agreement with Pakistan on the final review of a $3 billion bailout, with the country set to receive $1.1 billion after approval from the fund’s executive board in late April.
“Pakistan’s economic and financial position has improved in the months since the first review, with growth and confidence continuing to recover on the back of prudent policy management and the resumption of inflows from multilateral and bilateral partners,” said Nathan Porter, IMF’s Mission Chief, in a statement.
Market Expectations Met with Smooth IMF Review
Yousuf M. Farooq, Director of Research at Chase Securities, observed that the positive momentum was “in line with expectations.” He further stated, “Market participants were expecting a smooth review with the IMF after the appointment of the new finance minister and the completion of all targets.”
Awais Ashraf, Director of Research at Akseer Research, highlighted that investor sentiment was propelled by the staff-level agreement for the release of $1.1 billion with the IMF. He emphasized that the agreement demonstrated the new government’s commitment to continue policy efforts. Ashraf also noted that exploration and production, oil marketing and gas distribution companies, along with banks, are expected to be the main beneficiaries of the reforms stressed by the IMF.
Positive Impact on Pakistan Dollar Bonds
Following the announcement of the staff-level agreement, most Pakistan dollar bonds were trading higher on Wednesday. The 2027-maturing bond was up 0.25 cents at 83.957 cents on the dollar, while the 2025 bond saw an increase of 0.21 cents, trading at 92.023 cents on the dollar.
The positive momentum at the Pakistan Stock Exchange, driven by the staff-level agreement with the IMF, reflects the improving economic and financial position of Pakistan. The market’s response to the agreement highlights investor confidence in the country’s policy management and commitment to reforms. The positive impact is also evident in the trading of Pakistan dollar bonds, indicating increased interest from international investors.
