IMF Agreement
KARACHI: The Pakistan Stock Exchange (PSX) kicked off the week with a robust uptrend, propelled by the signing of a new International Monetary Fund (IMF) deal, which saw the benchmark KSE-100 index surpass the significant 81,000 mark.
During intraday trading, the index surged by 1,168.64 points or 1.46%, reaching 81,112.73 points, marking a substantial increase from the previous close of 79,944.10 points.
Raza Jafri, CEO of EFG Hermes Pakistan, highlighted the market’s positive response to the IMF staff-level agreement, a crucial milestone involving a $7 billion Extended Fund Facility over 37 months.
According to Jafri, this agreement is anticipated to bolster macroeconomic stability and facilitate essential reforms in sectors such as taxation, energy, and equitable fiscal distribution between the federal government and provinces.
Ahsan Mehanti, an analyst at Arif Habib Corp, attributed the stock market’s record-breaking performance to investor optimism surrounding the IMF agreement.
Mehanti noted that speculation about potential interest rate cuts by the State Bank of Pakistan (SBP) further fueled bullish sentiment, particularly amid the ongoing earnings season.
The preceding Friday had seen volatile trading sessions, influenced in part by the Supreme Court’s decision on reserved seats, which had initially caused the market to dip by 48.26 points or 0.06%, closing at 79,944.10 points.
Despite this minor setback, market sentiment quickly rebounded as attention shifted to the broader implications of the IMF deal and its potential economic benefits.
The PSX’s surge to new heights reflects growing investor confidence and expectations of economic stability driven by the IMF agreement.
The infusion of foreign funds through the IMF program is anticipated to provide a much-needed boost to Pakistan’s financial markets, facilitating structural reforms crucial for long-term growth and stability.
Looking ahead, analysts and market participants are closely monitoring developments related to the IMF program implementation, as well as domestic economic indicators and corporate earnings reports.
The positive momentum seen at the start of the week underscores the market’s resilience and its ability to respond favorably to significant policy developments and external financial support.
