The Pakistan Stock Exchange (PSX) continue their upward trajectory, defying uncertainties surrounding the central bank’s forthcoming monetary policy announcement. The benchmark KSE-100 Index effortlessly surpassed the 71,500 level during the early trading hours on Monday, showcasing resilience amidst market fluctuations.
By 1 pm, the benchmark index stood at 71,761.35, marking an impressive increase of 851.45 points or 1.2%. The market witnessed widespread buying activities across various sectors, including automobile assemblers, cement, chemical, commercial banks, oil & gas exploration companies, and OMCs, all trading in positive territory.
In a notable development, it has been reported that Pakistan is not yet included on the agenda of the International Monetary Fund (IMF) executive board meetings scheduled until May 1. This development holds significance as Pakistan awaits approval from the executive board, which would unlock approximately $1.1 billion as the final tranche of the $3-billion Stand-By Arrangement signed in June 2023.
Mohammed Sohail, CEO of Topline Securities, highlighted the positive factors driving the market, including the government’s formal loan request to the IMF and robust March quarter dividends. Despite the ongoing rally, shares are trading at an attractive forward-looking Profit to Earnings ratio of 4, indicating potential upside despite the market’s record surge.
The positive momentum in the Pakistan stock market can be attributed to various factors, including the successful conclusion of the $3-billion Stand-By Arrangement with the IMF and preparations for a larger, longer-term program with the lender. Additionally, developments on the foreign relations front have contributed to easing investor sentiment, previously rattled by record inflation and sluggish economic growth.
Globally, Asian stocks rebounded on Monday, accompanied by a rise in bond yields, as concerns regarding a wider conflict in the Middle East subsided. Investors displayed a preference for riskier assets, leading to a retreat in safe-haven assets like gold and the dollar. Furthermore, crude oil prices declined as the likelihood of a significant supply disruption diminished following statements from Iran indicating no plans for retaliation after an Israeli drone attack within its borders. This follows an earlier Iranian missile and drone attack on Israel.
MSCI’s broadest index of Asia-Pacific shares surged by 0.93%, reversing some of the losses from Friday, triggered by news of the Israeli strike.
