Market cheers IMF bailout, KSE-100 gains over 1,200 points

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index gained over 1,200 points to close above 81,000 on Monday as investors cheered the staff-level agreement between Pakistan and the International Monetary Fund (IMF).

The KSE-100 started the session with a strong buying spree that largely continued throughout the session.

At close, the benchmark index settled at 81,155.6, up by 1,211.51 points or 1.52%.

“This positive session was bolstered by Pakistan’s successful negotiation with the IMF,” brokerage house Topline Securities said in its post-market report.

In the E&P sector, POL surged after announcing a significant discovery at Jhandial 3, yielding an average of 715 barrels per day of oil and 8.9 million cubic feet per day of gas, Topline said.

Leading stocks including SYS, MCB, FFC, POL, HUBC, and ENGRO contributed significantly, collectively adding 599 points to the index’s rise, it added.

The sentiment – which has persisted ever since the budget saw no new taxes on the capital markets – was given a boost over the weekend as the IMF announced a new 37-month, $7-billion bailout for Pakistan on Friday night.

The announcement, largely in line with market expectations, gives another helping hand to the faltering economy that had earlier received a $3-billion loan – labelled the Stand-By Arrangement – just last year.

The IMF programme is seen as a roadmap for Pakistan that struggles to control expenditure, and has to service a mountain of debt that eat away at its tax revenue.

Despite the struggling state of the economy, KSE-100 companies have announced impressive profits, and many analysts believe share prices are still trading lower than their actual potential despite the record rise during fiscal year 2023-24.

However, during the previous week, the PSX had remained under pressure as investors opted to book profit on available margins.

On Friday, the KSE-100 closed nearly flat after recovering from an early-day 1,300-point loss the index had suffered after the Supreme Court’s verdict on reserved seats.

Globally on Monday, US bond futures slipped and the dollar firmed on Monday as investors wagered the attack on US presidential candidate Donald Trump made his victory more likely, while injecting a whole new level of political uncertainty into markets.

Investors have tended to react to the prospect of a Trump win by pushing Treasury yields higher, in part on the assumption his economic policies would add to inflation and debt.

Futures for 10-year Treasuries slipped 13 ticks, while cash bonds were untraded due to the Japanese holiday.

S&P 500 futures and Nasdaq futures were both marginally higher.

Meanwhile, the Pakistani rupee registered some improvement, appreciating 0.10% against the US dollar in the inter-bank market on Monday. At close, the currency settled at 278.11, a gain of Re0.29 against the greenback.

Volume on the all-share index marginally increased to 441.34 million from 437.31 million a session ago.

The value of shares rose to Rs27.23 billion from Rs23.48 billion in the previous session.

PIA Holding Company was the volume leader with 35.76 million shares, followed by Pak Elektron with 25.84 million shares, and WorldCall Telecom with 24.92 million shares.

Shares of 457 companies were traded on Monday, of which 265 registered an increase, 141 recorded a fall, while 51 remained unchanged.