February, 22, 2024
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Pakistan Stock Exchange Soars on IMF's Reform Approval

Pakistan Stock Exchange Soars on IMF’s Reform Approval

Infostani International- The Pakistan Stock Exchange experienced a second consecutive session of positive trading on Friday as the International Monetary Fund’s (IMF) Executive Board concluded the first review of Pakistan’s economic reform program successfully.


Pakistan: IMF Board Approval and Positive Economic Indicators Drive Surge in KSE-100 Index – Market Insights and Analyst Perspectives

The KSE-100 index gained 565.79, or 0.88 percent, at 10:56 am, reaching 65,183.35 from the previous close of 64,617.56, as per the PSX website.

Mohammed Sohail, chief executive of Topline Securities, attributed the bullish momentum to the IMF board meeting, stating that the “hint in their statement on lower inflation” boosted positive sentiments today.

Raza Jafri, head of equities at Intermarket Securities, also attributed the rally to the IMF board’s approval. He added that the IMF estimated June’s inflation data to ease down to 18.5 percent, increasing expectations of monetary easing going forward. This, along with emerging political clarity, helped sustain the rally, Jafri said.

Faran Rizvi, head of equity sales at JS Global, echoed the same sentiments. “The long-awaited approval news from the IMF board for the next tranche has finally arrived, satisfying the market’s anticipation,” he said.

He noted the index showed “potential for reaching a new high around 70,000, providing optimism for investors”. However, he cautioned that the current crisis in the Middle East remained a significant factor that could impact oil price stability, posing concern for the economic outlook of the country.

Pakistan Stock Exchange Soars on IMF's Reform Approval
Economic activity has stabilized in Pakistan, although the outlook remains challenging

IMF Board Approves $700 Million Immediate Disbursement, Reinforcing Confidence in Pakistan’s Economic Reforms

A day earlier, the IMF board had completed its first review of Pakistan’s economic reform program supported by a $3 billion Stand-By Arrangement (SBA) and allowed the immediate disbursement of $700 million.

This latest disbursement will bring the cumulative total under the arrangement to an impressive $1.9 billion. The financial support provided by the IMF propels global confidence in Pakistan’s commitment to implementing economic reforms.

The IMF board observed, “Economic activity has stabilized in Pakistan, although the outlook remains challenging and dependent on the implementation of sound policies.” It also emphasized that Pakistan “requires strict adherence to fiscal targets while protecting social spending, a market-determined exchange rate to absorb external shocks, and further progress on structural reforms to support stronger and more inclusive growth.”