Bulls maintained a hold of the trade floor at the Pakistan Stock Exchange (PSX) on Monday as shares gained over 700 points in intraday trade despite delay in the International Monetary Fund (IMF) staff-level agreement.
The benchmark KSE-100 climbed 759.91, or 0.66 per cent, to stand at 116,296.07 points from the last close of 115,536.16 at 11:23am.
Mohammed Sohail, chief executive of Topline Securities, observed that despite the IMF staff-level agreement delay, the market “remained positive amid hope of resolution of old circular debt through banks funding”.
Yousuf M. Farooq, director research at Chase Securities, said, “The market is positive on expectations of a smooth staff-level agreement with the IMF.
“Moreover, sentiment remains upbeat due to the anticipated resolution of circular debt and a potential reduction in power tariffs.”
He added that the participants also expected “some improvement in the current account, driven by higher remittances during Ramazan”.
Awais Ashraf, director research at AKD Securities, attibuted the positive momentum to “the IMF mission’s positive remarks on Pakistan’s progress in meeting the Fund’s targets have boosted investor confidence in the imminent signing of the staff-level agreement”.
“Meanwhile, energy sector stocks are expected to stay in focus in the coming days, given the increased likelihood of a one-time resolution of circular debt,” he added.
Last week, despite a pause in interest rate cuts and a weakening rupee due to declining foreign exchange reserves, the stock market had remained in the green zone for the fifth consecutive week, propelling above 115,000 level after almost two months.
According to AKD Securities Ltd, the week had started on a negative note as the State Bank of Pakistan’s Monetary Policy Committee delivered a surprise status quo in the benchmark interest rate at 12pc coupled with the IMF raising concerns over the government’s plan for resolving Rs1.25 trillion circular debt through commercial bank borrowing, kept investors cautious.
This positive performance was supported by improved investor sentiment following some ‘relaxations’ provided during the first review by the visiting IMF mission.
The market traded within a narrow band of 2,100 points during the week, remaining lacklustre as trading activity was subdued due to Ramazan.
More to follow
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