KARACHI, May 12, The Pakistan Stock Exchange (PSX) on Monday
witnessed a historic surge following a ceasefire agreement between
Pakistan and India, and an approval granted by the International
Monetary Fund (IMF) for release of a loan tranche.
During the opening session on the first day of the week, the stock
market climbed to 117,104.11 points – a gain of staggering 9,928 points
– as investors seemed confident following the positive developments on
political and economic fronts.
Later, the KSE-100 index traded at 9,475.49 points to hit 116,650.12
points with a positive change of 8.84 percent, forcing the suspension of
the market for one hour.
Experts have attributed the historic surge to a powerful convergence of
positive developments, with the most significant catalyst being the
ceasefire agreement between India and Pakistan.
The announcement for the ceasefire came after weeks of tension following
the Pahalgam attack, which had triggered aggressive selloffs and fueled
widespread investor concerns.
Furthermore, Pakistan has secured a crucial financial lifeline with the
IMF’s approval of a $1 billion disbursement under the Extended Fund
Facility (EFF) and a $1.4 billion Resilience and Sustainability Facility
(RSF).
These developments coincided with the State Bank of Pakistan’s (SBP)
recent decision to reduce the policy rate by 100bps to 11pc.
On May 9, the Executive Board of the International Monetary Fund (IMF)
formally approved a $1 billion disbursement for Pakistan under the
Extended Fund Facility (EFF), marking a significant step in the
country’s ongoing economic stabilisation efforts.
The tranche was greenlit following Pakistan’s successful completion of
key performance benchmarks. The EFF program, which is designed to
support countries facing balance-of-payment difficulties, spans a
37-month period.
Additionally, Pakistan is also a participant in the Resilience and
Sustainability Facility (RSF), which is aimed at enhancing climate
resilience and spans 28 months. However, the current disbursement only
pertains to the EFF.
This immediate release of funds is expected to provide crucial support
to Pakistan’s foreign exchange reserves, ease fiscal pressure, and help
maintain economic momentum amid ongoing global financial uncertainty.
The IMF’s decision came after Pakistan fulfilled major structural
benchmarks, including improvements in the tax-to-GDP ratio, maintaining
a primary fiscal surplus, and achieving provincial fiscal targets.
A day after terrible shedding triggered by geopolitical aggravation, the
Pakistan Stock Exchange (PSX) stood from the ground up on Friday.
The benchmark KSE-100 Index was hovering at 105,759 after gaining more
than 2,200 points during the opening hours of trade. Later, things
further improved and the index closed at 107,174 after attaining 3,647
points.
Across-the-board buying was observed in key sectors, including
automobile assemblers, cement, commercial banks, oil and gas exploration
companies, OMCs, and power generation.
Besides, index-heavy stocks, including HUBCO, MARI, OGDC, PPL, POL, PSO,
and SNGPL, also traded in the green as bulls returned to the PSX.
Experts linked the latest bullish spree with meeting of the Executive
Board of the International Monetary Fund (IMF).
In the preceding week, the PSX grappled with downward trend amid war
clouds. Thursday’s trading started off on an encouraging note as the
index rose to 111,881 after gaining 1,800 points. However, the euphoria
proved short-lived.
The KSE-100 index plummeted by 7,516 points to 102,492 at one point,
prompting the managers to stop the activities.
The situation could not much improve and the KSE-100 index eventually
closed at 103,526 after losing 6,482 points. In all, the PSX lost more
than 12,000 points in the last two days (Wednesday and Thursday)