PSX jumps more than 800 points on predicted ‘positive news’ from IMF

The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) opened in the green on Monday, rising almost 600 points in early morning trading.

By 9:45 a.m., according to the PSX website, the bourse had gained more than 450 points. At 10:40 a.m., the index hit 41,734.31 points, an increase of 683 points or 1.6%.

Following the government’s announcement of a 10pc “super tax” on large-scale industries, including cement, steel, sugar, oil and gas, fertilizers, LNG terminals, textile, banking, automobile, chemicals, beverages, and cigarettes, the index crashed on Friday, losing over 2,000 points, or 4.8pc, in the morning session.

Salman Naqvi, the head of research at Aba Ali Habib Securities, credited today’s upswing to several predicted positive developments. “It is hoped that Pakistan will receive a letter from the International Monetary Fund (IMF) today, after which the loan arrangement would be finalized,” he told Dawn.com.

In addition, the Chinese loan rollover of $2.3 billion had been deposited, strengthening investor optimism. “We are also discussing delayed oil payments with Saudi Arabia,” Naqvi said.

Ahsan Mehanti of the Arif Habib Corporation stated that the stock market showed a significant recovery before this week’s budget approval to resume negotiations over the IMF rescue program.

“Rising global equities and the probable approval of a Saudi oil deferred payment facility of up to $3.6 billion acted as catalysts for bullish sentiment,” he added.

Raza Jaffrey, the head of research at Intermarket Securities, believes that receiving the $2.3 billion in commercial loans from China “is assisting the balance of payments and boosting sentiment on the KSE100.”

He said there was also a feeling that Friday’s drop, caused by the hefty one-time taxes on specific sectors, was exaggerated, especially considering that it moved the IMF program closer.