Shares at the Pakistan Stock Exchange (PSX) continued to rally on Thursday, with the benchmark index crossing the key 40,000 points mark.
The KSE-100 index jumped 1,061.63 points, or 2.67 per cent, to close at 40,846.53 points. It reached an intraday high of 1,209.79 points, or 3.04pc, around 3pm.
“Stocks showed strong recovery in the earnings season on institutional interest in scrips across the board after the government’s decision to make tough decisions to seek IMF (International Monetary Fund) programme revival,” said Arif Habib Corporation’s Ahsan Mehanti.
He added that investor speculation over likely help from the United States to revive the programme as well as financial support from the United Arab Emirates and Saudi Arabia played a catalyst role in the bullish activity.
Dalal Securities CEO Siddique Dalal said it was evident the government had begun implementing the IMF’s conditions for the revival of the loan programme. He was referring to the steep depreciation of the rupee in the interbank and open markets today after an unofficial cap of the USD-PKR exchange rate was removed.
“Taxes will be imposed [through a mini-budget] and inflation will rise … but the IMF programme revival will unlock inflows from other multilateral lenders,” Dalal said, adding that the oil and banking sectors drove the rally.
“The KSE-100 has continued its upward momentum, pulled higher by refineries on news that the refinery policy has been finalised. Value buying is also being seen in the banking and cement sectors,” said Intermarket Securities’ Head of Equity Raza Jafri.
First National Equities Limited Director Amir Shehzad also shared Jafri’s view, saying the market rose on expectations that the finalised refinery policy would be approved.
He further said the cement and steel sectors rallied on expectations of a large increase in the development allocation in the upcoming mini-budget. “It is assumed that political uncertainty will be controlled due to which the market rose,” he added.
The KSE-100 index had shed nearly 2,000 points in the previous week on political instability after Punjab and Khyber Pakhtunkhwa assemblies were dissolved. However, bulls regained control this week on a lower-than-expected increase in the interest rate and expectations that the International Monetary Fund (IMF) programme would be resumed soon.
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