Pakistan equities close above 66,000 on IMF expected disbursement, strong earnings growth, election hopes

Pakistan equities close above 66,000 on IMF expected disbursement, strong earnings growth, election hopes
In this file photo, taken on October 9, 2018, Pakistani pedestrians walk past a bronze bull statue outside the Pakistan Stock Exchange (PSE) building in Islamabad. (AFP/File)
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Updated 15 December 2023
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Pakistan equities close above 66,000 on IMF expected disbursement, strong earnings growth, election hopes

Pakistan equities close above 66,000 on IMF expected disbursement, strong earnings growth, election hopes
  • Benchmark KSE100 index extended its previous day gain to close at the 66,130 level on Friday with gains of 679 points
  • Rupee also closed the weekend on a positive note at Rs283.26 against previous close of Rs283.51 versus USD in interbank market

KARACHI: Pakistan equities closed the weekend trading session on a bullish note amid continued high sentiments built on the completion of the first review of an International Monetary Fund (IMF) bailout program and expected disbursement of $700 million, strong earnings growth and hopes of general elections in February next year, analysts said.
The benchmark KSE100 index extended its previous day’s gain to close at the 66,130 level on Friday with gains of 679 points.
The gain can be attributed partly to the Election Commission of Pakistan’s clarification that polls would take place on February 8, 2024, according to Pakistan Stock Exchange (PSX) data and a Topline Securities research report.
However, the key index closed slightly negative (-0.14 percent) on a week-on-week basis, putting an end to a 10 week-long positive weekly closing streak due to profit-taking by investors and some concern with respect to a delay in upcoming elections due to media speculation.
“Stocks closed bullish amid record high trades ahead of the IMF board meeting scheduled for January 11 and on strong earnings outlook and surging foreign exchange reserves,” Ahsan Mehanti at Arif Habib Corporation told Arab News.
He said the bullish sentiments were fueled by improved economic indicators and developments on the investment front with Pakistan Telecommunication Company Limited (PTCL) acquiring Telenor’s Pakistani operation, and Saudi Aramco moving to buy a 40 percent stake in Gas and Oil Pakistan.
The current bull run was triggered after the South Asian country in July won a nod from the IMF for a crucial $3 billion short-term financing program and successfully completed its first review. Pakistan expects another tranche of $700 million from the IMF after its board meets on January 11, 2024.
The strong earnings growth of listed companies, and stability of the Pakistani rupee after a crackdown on smuggling and dollar hoardings, have also played a key role in the prevailing bullish trend at the bourse.
Pakistan’s national currency also closed the weekend on a positive note to close at Rs283.26 against the previous close of Rs283.51 versus the United States dollar in the interbank market, according to State Bank of Pakistan data.
Among major developments that drove sentiments at the equity market was a move by the central bank to keep the policy rate unchanged at 22 percent due to the impact of a recent hike in gas prices on inflation in November 2023 while Fitch Ratings affirmed Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘CCC’.
Inflation continued to remain on the higher side mainly due to an increase in gas prices last month.
Inflation measured by the Sensitive Price Indicator (SPI) for the week ended Thursday on an annual basis increased to 43.16 percent with major contribution coming from gas charges for Q1 that increased by 1108.59 percent, cigarettes (93.22 percent), chilli powder (81.74 percent), wheat flour (81.40 percent), garlic (71.17 percent), and broken basmati rice (64.30 percent), according to the Pakistan Bureau of Statistics.