PSE bounces over 2,446 points on the back of IMF deal
KARACHI, July 03 (SABAH): The Pakistan Stock Exchange (PSE) was witnessing a huge surge on Monday – the first working day after the country clinched the $3 billion deal with the International Monetary Fund (IMF) – as the benchmark KSE-100 Index gained 2,446 points during early trading. On 11th April PSE had witnessed increase of 1700 points in one day and now on Monday PSE witnessed the increase of 2,446 point in one day nearly after 15 months.
It means the benchmark index at that point touched 43,899 against the previous level of 41,452 recorded on Tuesday last week before the start of the Eid holidays.
Earlier at 9:37 AM, the KSE-100 Index was, however, recorded at 43,439.33 at which point the trading had to be suspended because of the volatile nature of the market, just seven minutes after the session started. “Halt market” mechanism springs into action if the index gains or declines over 5 percent in during the session.
But when the trading was resumed 10:42 AM, the bullish sentiments continued to rule as the KSE-100 Index climbed by 2,372.93 points, or 5.72 per cent, to 43,825.61 [11:05am].
The latest boost in the stock market comes as the US dollar depreciated against the rupee in open even during the Eid holidays thanks to the successful arrangement reached with the world’s top lender.
In fact, it was available for even below the official – interbank – rate of Rs285.99 in some cases as more and more people started dumping the US dollars in the market they had hoarded or kept as financial guarantee amid a turbulent economy.
Some experts are of the opinion that the rupee may gain at least Rs30 rupees during the next one of two days.
The index opened in the green zone and remained positive throughout the session before the trading was halted for an hour after the index hit its upper circuit limit of 5% at around 9:30am. The trading resumed at around 10:37pm.
Pakistan secured a badly-needed $3 billion short-term financial package — subject to approval by the IMF board in mid-July — on Friday, giving the South Asian economy a much-awaited respite as it teeters on the brink of default.
Speaking to a private TV channel, Pakistan-Kuwait Head of Research Samiullah Tariq said the market is performing due to the IMF deal and the reduction of the uncertainty on the balance of payments front.
The loan is a lifeline for Pakistan as it gives a nine-month roadmap to the nation, which is facing one of its worst economic and political crises on record.
Ecohing Tariq, Arif Habib Limited’s Head of Research Tahir Abbas also said that the rally is primarily due to the staff-level agreement with the IMF.
When asked whether the rally would be short-lived, Abbas said: “No, the momentum and sentiment are very positive given now the country has an economic roadmap ahead for the next nine months.”