PSX Benchmarks Rise as Market Awaits IMF Loan Tranche Approval

The Pakistan Stock Exchange (PSX) experienced a positive turn during Tuesday’s trading session, with its primary index sustaining levels above the pivotal 57,000-point threshold.

Midday figures showed the KSE-100 index at a notable 57,539.71 points at 11:20 am. This was a 461.75 point, or 0.81 per cent leap compared to its previous closing mark of 57,077.96 points, indicating a moderate but steady climb for the day's trade.

Last week, the index had reached a record peak, surging past the 57,000-point border for the first time, ignited by Pakistan’s successful discussion with the International Monetary Fund (IMF) which concluded in a staff-level agreement.

A successful negotiation with the IMF often leads to investor confidence as it generally signals economic stability and can result in substantial financial support. In this case, the agreement set the stage for a $700 million second loan tranche, hinging on the IMF’s Executive Board’s go-ahead, which is anticipated to occur around December 7.

Analysts seem to remain bullish about the prospects for Pakistani equities. One example is Raza Jafri, the head of equity at Intermarket Securities, who suggests that, despite the recent upswing, market valuations still seem attractively priced.

Complementing this view is Ali Malik, the CEO of First National Equity, attributing the session's upward movement to the high expectations investors have regarding the IMF's forthcoming decision on the second tranche. Malik points out that recent statistics indicate a narrowing trade deficit for Pakistan, signifying stronger exports. This, coupled with low price-to-earnings ratios in shares, underscores the perceived value currently available in the market.

Moreover, he notes that heavyweight sectors of the industry are deemed particularly bargain-like right now due to pronounced increases in asset replacement values, emphasizing the market's competitive pricing.

PSX, IMF, Gains