The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index opened in the green on Monday, gaining over 600 points in early morning trade.
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 percent.
The rally comes after the index dropped significantly on Friday following the government’s announcement of a new tax on large industries. The tax is expected to impact sectors such as 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 good news expected today. “Pakistan will hopefully receive a letter from the International Monetary Fund (IMF) today after which the loan agreement will be finalised,” he told Dawn.com.
The Chinese loan roll-over of $2.3 billion, Naqvi 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 a sharp recovery ahead of the budget approved this week to resume the deal over the IMF bailout program.
“Surging global equities and likely approval of Saudi oil deferred payment facility up to $3.6bn played a catalyst role in the bullish activity,” Mehanti added.
Meanwhile, Raza Jaffrey, head of research at Intermarket Securities, thought that the receipt of the $2.3bn in commercial loans from China “is helping the balance of payments and lifting sentiment at the KSE100”. 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 program closer.
