In anticipation of a swift deal between the government and the International Monetary Fund (IMF) that would prevent the cash-strapped nation from defaulting, shares at the Pakistan Stock Exchange (PSX) maintained their bull run on Thursday.
The local currency, which has taken a beating over the previous few weeks, has also begun to rebound due to these expectations in the interbank market.
The KSE-100 index increased by 743.27 points or 1.78 percent to settle at 42,466.59 points. At 3:28 pm, it hit an intraday high of 844.43 points, or 2.02 percentage points.
According to Ahsan Mehanti, director of Arif Habib Corporation, “stocks showed positive activity on robust currency recovery ahead of IMF accord and solid corporate earnings.”
Speculations about large rewards to businesses to settle circular debt and the rescheduling of debt obligations following the restart of the IMF programme, he continued, also played a catalytic role.
According to Salman Naqvi, head of research at Aba Ali Habib Securities, the anticipated agreement with the IMF was the main driver of the index’s increase. He stated, “We see progress,” and added that investors hoped the IMF accord would help the nation’s economic problems.
According to Naqvi, the market has been undervalued and the earnings-to-price ratio is quite alluring.
“The stock market will increase and the currency will appreciate if issues with the IMF are smoothly resolved.”
Nathan Porter is leading a mission from the IMF that is now in Islamabad to discuss the conclusion of the ninth review of a $7 billion loan programme. If the review is successful, Pakistan will get $1.2 billion from the IMF as well as the infusions it needs from allies and other multilateral lenders to avoid default.
A Memorandum of Economic and Fiscal Policies between the government and the major lender was “quite near to finalisation,” according to Aisha Ghaus Pasha, Minister of State for Finance and Revenue, who spoke to the media on Wednesday (MEFP).