Market witnesses gains amid likely ‘good news’ from IMF

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Monitoring Desk

KARACHI: According to the PSX website, the bourse witnessed an increase of over 450 points by 9:45am. At 10:40am, the index had reached 41,734.31 points, up 683 points, or 1.66 per cent.
The benchmark index closed at 41,878.57, up 826.78 points or 2.01pc from the previous close of 41,051.79.
The rally came after the index crashed on Friday, losing over 2,000 points, or 4.8pc, in the morning session following the government’s announcement of a 10pc “super tax” on large-scale industries including cement, steel, sugar, oil and gas, fertilisers, LNG terminals, textile, banking, automobile, chemicals, beverages and cigarettes.
Salman Naqvi, head of research at Aba Ali Habib Securities, attributed today’s rally to a number of factors as well as good news in the offing.
“Pakistan will hopefully receive a letter from the IMF today after which the loan agreement will be finalised,” he said.
The Chinese loan roll-over of $2.3 billion, he continued, had also been deposited which improved investor sentiment. “We are also in talks with Saudi Arabia regarding deferred oil payments,” Naqvi said.
Ahsan Mehanti of the Arif Habib Corporation said that stocks showed sharp recovery ahead of the budget approval this week for the resumption of the IMF bailout programme.
“Surging global equities and likely approval of Saudi oil deferred payment facility up to $3.6bn played a catalyst role in bullish activity,” he added.
Meanwhile, Raza Jaffrey, head of research at Intermarket Securities, was of the opinion that the receipt of the $2.3bn in commercial loans from China was “helping the balance of payments and lifting sentiment at the KSE-100”.
He continued that there was also a sense that Friday’s plunge, owing to the one-off steep taxation on certain sectors, was “overdone” especially as it brought the IMF programme closer.