Karachi, July 15, 2024 – The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) surged to a new record high of 81,156 points on Monday, buoyed by the announcement of a staff-level agreement (SLA) between Pakistan and the International Monetary Fund (IMF).
The IMF’s announcement at the end of last week confirmed that it had reached an SLA with Pakistan for a $7 billion Extended Fund Facility (EFF), pending approval from the IMF executive board. This positive development fueled investor confidence, propelling the KSE-100 index to gain 1,212 points from last Friday’s closing of 79,944 points.
Analysts at Topline Securities Limited noted the strong momentum in the KSE-100 index, which reached an intraday high of 81,484 points before settling at 81,156 points, marking a 1.52% increase. They attributed this robust performance to Pakistan’s successful negotiations with the IMF, securing the $7 billion EFF for a 37-month period.
The energy and petroleum sector (E&P) played a significant role in the day’s gains. Pakistan Oilfields Limited (POL) surged after announcing a major discovery at Jhandial 3, which is expected to yield an average of 715 barrels per day of oil and 8.9 million cubic feet per day of gas. This discovery significantly boosted investor sentiment.
Leading stocks including Systems Limited (SYS), MCB Bank Limited (MCB), Fauji Fertilizer Company (FFC), Pakistan Oilfields Limited (POL), Hub Power Company (HUBC), and Engro Corporation (ENGRO) were key contributors to the index’s rise. Collectively, these stocks added 599 points to the index.
Trading activity was robust, with 439 million shares changing hands, valued at Rs 16.50 billion. Pakistan International Airlines Corporation Limited (PIAHCLA) emerged as the most actively traded stock, with a volume exceeding 35.7 million shares.
The strong performance of the KSE-100 index underscores investor optimism following the IMF agreement, reflecting confidence in Pakistan’s economic prospects. The SLA is expected to provide much-needed financial stability and support economic reforms in the country.
Market participants are hopeful that the IMF’s EFF will bolster Pakistan’s foreign exchange reserves, stabilize the currency, and foster economic growth. The agreement is seen as a positive step towards addressing the country’s fiscal challenges and restoring investor confidence.
The day’s gains reflect the market’s positive sentiment towards the IMF agreement, with expectations of improved economic stability and growth prospects. Analysts anticipate that the positive momentum in the stock market will continue as the IMF program progresses and further economic reforms are implemented.
As Pakistan navigates its economic challenges, the support from the IMF through the EFF is expected to play a crucial role in stabilizing the economy and fostering sustainable growth. Investors remain optimistic about the future, anticipating that the IMF agreement will pave the way for a more stable and prosperous economic environment.