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Pakistan's Premier Multilingual News Agency

PSX reaches new highs amid optimism for a longer deal with the IMF

Karachi, 21 June 2024, (GNP): The Pakistan Stock Exchange (PSX) maintained its post-budget rally on Friday, achieving new heights by surpassing the 79,000 mark in the early hours of trading.

The PSX’s benchmark KSE-100 shares index increased by 1,003.49 points, or 1.27%, reaching 79,969.81 points, up from the previous close of 78,801.53 points. During intraday trading, the stocks briefly hit the 80,000 mark, the highest level ever in PSX history.

This surge was driven by positive investor sentiment following the announcement of the budget, which included several measures favorable to the business community.

Analysts attribute the market’s performance to expectations of economic stability and growth, as well as increased foreign investment.

The rally reflects confidence in the government’s fiscal policies and the potential for a robust economic outlook in the coming months.

EFG Hermes Pakistan’s CEO, Raza Jafri, speaking to Geo.tv, noted that the post-budget rally is ongoing, bolstered by Fitch’s recent comments. These comments have strengthened the belief that Pakistan will be able to secure a new International Monetary Fund (IMF) program.

Jafri highlighted that investor confidence is being reinforced by these positive developments, as they suggest a pathway to economic stability.

The potential IMF program is expected to provide critical financial support and structural reforms, which could further enhance market sentiment and attract foreign investment.

He also mentioned that the business-friendly measures announced in the budget are likely to have a long-term positive impact on the market’s performance.

“Domestic liquidity is also strong, with equities looking increasingly attractive given monetary easing has commenced,” he said.

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Meanwhile, Alpha Beta Core CEO and economic analyst Khurram Schehzad stated that expectations from the FY25 budget, which is seen as paving the way for a larger and longer IMF program, have boosted confidence among both local and foreign portfolio investors.

Schehzad emphasized that the anticipated IMF program would likely bring about significant economic reforms and financial stability, which are crucial for sustained growth.

He also noted that the budget’s focus on infrastructural development and business incentives has created a favorable environment for investment.

As a result, market participants are optimistic about the future prospects of the Pakistan Stock Exchange and the overall economy.

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