A positive momentum was witnessed at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 Index gaining over 633 points, as the market rejoiced over reports regarding expected inflow from Saudi Arabia.
The benchmark index opened in the positive and remained so throughout the trading session. At close, the KSE-100 Index settled at 40,350.89, an increase of 633.74 points or 1.6%.
KSE-100 ends session on a flat note
Across-the-board buying was witnessed with index-heavy sectors including, automobile, cement, chemical, commercial banks, oil & gas exploration companies and OMCs settling at gains.
Analysts said the upward momentum in the market was driven by reports suggesting that the Kingdom of Saudi Arabia has assured the International Monetary Fund (IMF) that it will deposit $2 billion in Pakistan, a key step for the revival of IMF’s bailout programme.
The programme’s revival has been deemed crucial to stabilise the economy that has been hit by a severe dollar shortage in recent months with reserves held by the central bank treading at critically low levels.
“The positive sentiment is led by news regarding Saudi Arabia,” Saad Khan, Head of Research at IGI Securities, told Business Recorder.
“Moreover, inflows of $1 billion deposits from the UAE are also expected this week,” he said.
Friendly delay ‘last hurdle’ to IMF bailout
The IMF had said it needs to ensure financing assurances are in place in order to take “the next step with Pakistan”.
“The latest development suggests that we are a step closer to the resumption of the stalled IMF programme,” Khan quoted. Moreover, he said the country’s current account deficit is expected to be at $6 billion, “which is a very good number.”
Similar sentiments were expressed by Arif Habib Limited (AHL), a brokerage house, in a note.
“Investors celebrated Saudi Arabia’s announcement of a $2 billion additional deposit, removing a major stumbling block in unlocking the long-overdue tranche of the IMF’s Extended Facility Fund,” read the note.
The report said that investor participation grew significantly as they opted to add value to their portfolios with the E&P and cement sectors staying in the spotlight.
On the economic front, the Pakistani rupee registered significant gains in inter-bank market and closed at 284.42 against the US dollar following an appreciation of Rs3.43 or 1.2%.
Sectors driving the benchmark index upwards included, oil and gas exploration (201.62 points), fertilizer (85.24 points) and cement (75.58 points).
Volume on the all-share index increased to 171.4 million from 86.7 million on Wednesday while the value of shares traded surged to Rs5.1 billion from Rs2.4 billion recorded in the previous session.
Silk Bank Limited was the volume leader with 21.3 million shares followed by Pakistan Petroleum Limited with 13.6 million shares and Telecard Limited with 11 million shares.
Shares of 320 companies were traded on Thursday, of which 230 registered an increase, 70 recorded a fall and 20 remained unchanged.
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