Shares gain 491 points on hopes of IMF review completionBusiness
Shares at the Pakistan Stock Exchange (PSX) rose immediately after the opening bell on Wednesday on hopes that the ninth review of the International Monetary Fund (IMF) programme would be completed soon which would unlock $1.2 billion along with inflows from friendly countries.
The benchmark KSE-100 index climbed to 39,546.52 points, up 490.87 points, or 1.26 per cent, at 10:20am.
Ismail Iqbal Securities’ Head of Research Fahad Rauf said expectations were building that the government would take steps to resume the IMF programme which would help the country avert default.
He noted that exploration and production stocks were performing well on expectations that the circular debt would be reduced and gas prices hiked.
Aba Ali Habib Securities’ Salman Naqvi also shared Rauf’s view, noting that the unofficial cap on the USD-PKR exchange rate in the open market would be removed today.
One of the IMF’s primary conditions was adherence to a market-based exchange rate and the cap’s removal would be a step towards resuming the Fund programme, he said. “This makes it evident that the government is going to fulfil the IMF’s conditions as a result of which there is positivity in the market.”
He further noted that the interest rate was raised by 1pc on Monday — lower than market expectations of 1.5-2pc — because of which a positive effect could be seen in the cement and steel sectors.
The PKR was expected to depreciate by Rs15-20 in the open market today which would benefit the technology and exploration and production sectors, Naqvi added.
“Uncertainty is reducing because if we resume the IMF programme, other countries will also provide help which will ease the foreign exchange reserves crisis,” he commented.
Topline Securities Senior Manager Equity Mohammad Arbash said the removal of the price cap and the government’s steps to resume the IMF programme were both positives for the market.
“Short coverings and re-investments are driving the market upwards. The volumes so far are very encouraging. The general public has also re-entered the market,” commented First National Equities CEO Ali Malik said.
More to follow.