The Pakistan Stock Exchange (PSX) breached the 57,000 ceiling in yet another on Thursday, as the staff-level agreement reached with the International Monetary Fund (IMF) on the first review of the $3 billion stand-by arrangement boosted the investors’ confidence.
The KSE-100 index closed at 57,397.02 points, up 716.96 or 1.26 per cent from the previous close of 56,680, according to the PSX website.
“Equities closed on a positive note today on improved liquidity and investors’ sentiment following staff level agreement with IMF yesterday coupled with the decline in T-bills yields, approximately by 50bps,” brokerage house Ismail Iqbal Securities said in its report. “Market volume surged to the highest level since June’21.”
The bullish trend means that the stock market was becoming more lucrative for investors when compared with the unproductive real estate sector, which, in some cases, has been witnessing stagnation and even a decline in prices.
Moreover, the rising stocks will certainly also discourage investment in safe haven currencies like the dollar and assets like gold.
“Trading volumes increased to 360mn shares today as compared to 307mn shares in the previous session,” said the statement.
The brokerage house added that oil and gas exploration companies, fertiliser, and oil and gas marketing companies sectors were the major contributors in the session that added 470 points to the index.
Pakistan’s economy has been battered by the record-high inflation and interest rates, which means there is very little or no economic activity that can help the people lessen the cost-of-living crisis by getting new jobs or enhanced wages.
The rupee also recovered on Thursday after recording consecutive losses in 17 sessions. The local currency appreciated by 76 paise to close at Rs287.38 against the closing of Rs288.14 on the previous day.
It merits here to mention that the development came a day after the IMF announced that its review mission and Pakistani authorities have reached an agreement on the first review of the $3-billion stand-by arrangement (SBA).
“While inflows following increased regulatory and law enforcement helped normalize import and FX payments and rebuild reserves, the authorities recognize that the rupee must remain market-determined to sustainably alleviate external pressures and rebuild reserves. To support this, they plan to strengthen the transparency and efficiency of the FX market and to refrain from administrative actions to influence the rupee,” said the IMF statement.