Stocks rise 531 points as rupee recovers, oil prices dip
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Shares at the Pakistan Stock Exchange (PSX) opened the week on a positive note, with analysts citing the rupee’s strong recovery buoyed by a decline in international oil prices as well as Ishaq Dar’s upcoming appointment as the finance minister behind the rally.
The benchmark KSE-100 index gained 531.33 points, or 1.31 per cent, to close at 41,151.54 points.
The index saw an intraday high of 576.42 points, or 1.42pc, at 3:30pm.
Arif Habib Corporation’s Ahsan Mehanti said the PSX saw bullish activity during early trade on a stronger rupee and the upcoming appointment of a new finance minister which would “likely stabilise economic uncertainty”.
The Pakistani rupee appreciated by Rs2.63 against the dollar on Monday.
Prime Minister Shehbaz Sharif is set to return to Pakistan today, accompanied by Dar who will take charge as finance minister.
On Sunday, senior PML-N leaders met Miftah Ismail, who handed in his resignation. A statement released after the meeting confirmed that Nawaz Sharif and PM Shehbaz had nominated Dar as the finance minister.
First National Equities Limited Director Amir Shehzad agreed with Mehanti’s view, saying the primary reason for the index’s gains was the sentiment that developed in anticipation of Dar’s return and the hope that the situation would come under control. Consequently, investors became confident, he said.
Shehzad added that the cement sector has the highest potential to add points to the index.
Meanwhile, Head of Research at Intermarket Securities, Raza Jafri, said the KSE-100 was recovering on a combination of factors including lower oil prices, the apparent willingness of the West to listen to Pakistan’s debt restructuring requests, and the perception that Senator Dar may be able to bring the PKR under control.
No adverse development in politics over the weekend is also helping sentiments, he added.
PM Shehbaz had appealed to the world and rich nations for immediate debt relief last week in view of the devastating floods that have caused estimated losses of $30 billion.
He had told Bloomberg TV during his visit to New York that Pakistan had taken up the debt relief issue with UN Secretary General Antonio Guterres and world leaders.
“We have spoken to European leaders and other leaders to help us in Paris Club, to get us a moratorium,” he said, referring to rich nation creditors.
The country of 220 million would not be able to stand on its feet, Shehbaz added, “unless we get substantial relief”.
