Shares at the Pakistan Stock Exchange (PSX) recovered on Tuesday as an International Monetary Fund (IMF) delegation arrived in Pakistan to discuss the revival of the stalled loan programme.
The benchmark KSE-100 index jumped 801.79 points, or 2.01 per cent, to close at 40,673.06 points. It reached an intraday high of 845.99 points, or 2.12pc, around 3:04pm.
Arif Habib Corporation Director Ahsan Mehanti said share prices soared on hopes that the stalled IMF programme — which Pakistan needs to stave off default — would be revived after the delegation’s arrival in the country.
The prospects of reviving the programme had brightened after the government removed an unofficial cap on the USD-PKR exchange rate and allowed the local currency to devaluate along with raising petroleum prices, he added.
Mehanti expected that the bourse would sustain the recovery.
First National Equities Limited Director Amir Shehzad also shared the same view.
Dalal Securities CEO Siddique Dalal noted that the index tumbled yesterday after the blast in Peshawar’s Police Lines area, in which more than 80 people were killed, and the UAE president’s visit was postponed.
However, it returned to the green zone today on reports that Abu Dhabi may invest in state-owned enterprises and the IMF team’s arrival, he added.
Dalal commented that while the government had removed the exchange rate peg — one of the IMF’s main requirements — there was still some doubt whether Pakistan would be able to revive the programme.
He also noted that volumes remained low due to which the market may not be able to sustain the rally.
Senior government officials earlier told Dawn that IMF mission chief for Pakistan Nathan Porter had already arrived in Islamabad to start a technical discussion with authorities on Tuesday (today), which would continue till Friday (Feb 3).
The second phase of policy negotiations would continue till Feb 9 to finalise a memorandum of economic and financial policies (MEFP).
Pakistan requires about $8-9 billion during the remaining five months of the current fiscal year to meet international obligations and currently, the reserves held by the central bank are slightly over $3bn. The completion of the ninth review of the IMF programme would not only lead to a disbursement of a $1.2bn tranche but also unlock inflows from friendly countries.
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