On Tuesday, the Pakistan Stock Exchange (PSX) achieved another significant milestone as it crossed the 54,000 mark during early intraday trading. The market’s bullish trend is largely attributed to the growing interest of local investors, who are optimistic about the prospects of no more interest rate hikes due to decreasing inflation and the positive outcome of ongoing talks with the International Monetary Fund (IMF).
As of the time of this report, the benchmark KSE-100 Index reached 54,274.53, registering a gain of 414.17 points, or 0.77 percent.
The previous day, the KSE-100 Index had closed at 53,860.36, marking a new all-time high in the history of the Pakistan Stock Exchange. Various sectors, including cement, fertilizer, banking, and power, contributed to the continued momentum of the market.
One of the key reasons for investors’ confidence in a successful first review by the IMF of the $3 billion stand-by arrangement is the anticipation of progress in the privatization of state-owned enterprises (SOEs), a primary condition outlined in the IMF agreement.
Pakistan has already taken steps to meet IMF demands, including raising fuel prices and power and gas tariffs, while reducing subsidies to address the fiscal deficit. Privatizing the loss-making SOEs is now the next logical step.
Recent reports indicated that the IMF has requested the Pakistani finance ministry to provide updated data on the losses incurred by SOEs, rejecting older figures. This signals the IMF’s intent for the expedited disposal of these entities.
In terms of the stock market’s history, the KSE-100 Index had previously reached its highest point at 53,127 in May 2017. However, the index experienced a significant drop to 27,267 on March 26, 2020, during the tenure of the PTI government. Subsequently, a recovery took place, particularly as the IMF deal neared realization. Since June 22 of the current year when the benchmark index was at 40,152.05, it has surged by over 14,000 points, reflecting a positive economic turnaround and investor confidence in Pakistan’s financial markets.
