Market reports gains over 400 points amid the FATF hopes

Monitoring Desk

KARACHI: The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index opened in the green on Wednesday – after plummeting by over 1,100 points earlier this week – and gained more than 400 points in intraday trading as investors were buoyed over hopes that Pakistan may exit the FATF’s grey list.
According to the PSX website, the index opened at 41,054.68 points and had reached 41,497.92 points by 2:00pm, up 443.24 points or 1.08 per cent.
The market subsequently closed at 41,438.79 points, up 384.11, or 0.94pc.
Head of research at Intermarket Securities, Raza Jafri, heralded China’s assurances of further financial support as positive for the market.
“Negotiations with the International Monetary Fund (IMF) are ongoing to add to the recently announced budgetary measures, and the programme may resume soon,” he said.
The analyst said there were also expectations that this week’s review of the Financial Action Task Force (FATF) may lead to Pakistan exiting its grey list.
The global body, which monitors money laundering and terrorism financing, is holding a four-day session in Berlin from June 14 to June 17.
Ahsan Mehanti, director of the Arif Habib Corporation, concurred. “Stocks recovered sharply higher on investor speculations ahead of results of the FATF plenary meeting discussions expected to decide over exit from the grey list,” he said.
Moreover, he said, higher global crude oil prices, Capital Gains Tax (CGT) reductions in the federal budget catalysed the bullish activity.
Meanwhile, Salman Naqvi, head of Aba Ali Habib Securities, pointed out that the market was in an “oversold zone” and is now in “technical correction”.
He added that the news regarding the rescheduling of the loan from China enables the market to “bounce back” and investors were hopeful of added financial assistance from the neighbouring country.
The market regained momentum after a bloodbath at the PSX on Monday when the KSE100 index plummeted by 1,134.80 points. Analysts linked the bearish activity to the government increasing taxes on the banking sector in the budget, among other factors.