Shares at the Pakistan Stock Exchange (PSX) climbed more than 700 points in intraday trade on Monday on expectations of lower inflation numbers.
The benchmark KSE-100 index climbed 704.08 points, 0.9 per cent, to stand at 79,149.04 at 11:15am from the previous close of 78,444.96 points.
Mohammed Sohail, chief executive of Topline Securities, said that investors were “building new positions amid expectations of lower CPI (Consumer Price Index) reading”.
Moreover, he said that it was also expected that the International Monetary Fund (IMF) staff-level agreement (SLA) “will be reached soon after passing of tax-laden budget”.
Raza Jafri, chief executive of EFG Hermes Pakistan, highlighted that the passage of the FY25 budget was a “big step towards securing an IMF programme” and was being treated positively by investors.
“The inflation print is also due, and rate cuts are expected to continue in the next monetary policy. These factors continue to pull local flows into equities,” he added.
Yousuf M. Farooq, director of research at Chase Securities, attributed the upward trajectory to the “passing of the budget, [which] should lead to Pakistan getting into its next IMF programme”.
“A new IMF programme would lead to stability on the external front and a check on Pakistan’s fiscal account,” he elaborated.
Furthermore, he said that “lower inflation going forward should also lead to a gradual decline in interest rates and a gradual upward re-rating of the market”.
Awais Ashraf, director research of AKD Securities, echoed the same sentiments.
He said, “Approval of the budget in line with the IMF requirements has helped build investor confidence, as the odds of getting a new bailout package have improved.”
More to follow
