https://arab.news/v9km3
- Benchmark share index climbs 1.9 percent during intraday trading on expectations of substantive monetary easing
- Pakistan’s stock market has gained some 13 percent since government passed a reform-heavy budget in June
ISLAMABAD: Pakistan’s benchmark share index hit a record high on Thursday, climbing 1.9 percent in intraday trading, on expectations of further substantive monetary easing to spur economic growth.
The central bank has cut its key policy rate by a total of 450 basis points to 17.5 percent in three successive policy decisions since late July, taking heart as inflation eases.
Pakistan’s stock market hit an all-time high of 82,003 points and was trading at 81,800 as of 1:25 p.m. local time (08:25 GMT). It has gained some 13 percent since the government passed a economic reform-heavy budget in June aimed at securing a new International Monetary Fund program.
“Today’s market rise is reflective of the t-bill auction that happened on Wednesday where the government rejected bids in all tenors indicating a large rate cut in November,” said Ismail Iqbal Securities CEO Ahfaz Mustafa.
Pakistan’s central bank said disinflation was faster than expected and there was a possibility that average inflation for the fiscal year ending mid-2025 would fall below its forecast range of 11.5–13.5 percent.
“This coupled with the recent news of the IMF program and an expectation for inflation to slow to about 8 percent for September is all adding to the market making new intraday highs,” Mustafa added.
The IMF last week announced that its executive board will meet to discuss Pakistan’s $7 billion bailout program on Sept. 25 — allaying fears of a prolonged delay in much-needed funds for the country.
The South Asian nation struck a staff-level agreement with the global lender in June, but board approval for the 37-month program has been pending since then.