The Pakistan Stock Exchange (PSX) witnessed consecutive gains on Friday, buoyed by the successful conclusion of the first review of Pakistan’s economic reform program by the International Monetary Fund’s (IMF) Executive Board. The KSE-100 index, as per the PSX website, marked a significant increase of 565.79 points, or 0.88 per cent, reaching 65,183.35 by 10:56 am, up from the previous close of 64,617.56. This uptrend was largely attributed to the positive outcome of the IMF board meeting, which hinted at lower inflation, enhancing market optimism.
Market Analysis and Future Outlook
Mohammed Sohail, CEO of Topline Securities, attributed this bullish momentum to the outcome of the IMF board meeting. Raza Jafri, head of equities at Intermarket Securities, also credited the rally to the IMF board’s approval, noting the anticipated ease in June’s inflation data to 18.5pc, raising prospects of future monetary easing. Emerging political clarity was another factor contributing to the market’s positive performance. Faran Rizvi, head of equity sales at JS Global, expressed optimism, foreseeing the index potentially reaching new heights around 70,000. However, he also cautioned about the ongoing crisis in the Middle East and its potential impact on oil price stability, which could affect Pakistan’s economic outlook.
IMF’s Support and Pakistan’s Economic Stability
The IMF board’s recent completion of its first review under a $3 billion Stand-By Arrangement (SBA) has allowed for the immediate disbursement of $700 million, bringing the total to an impressive $1.9 billion. This financial backing from the IMF boosts global confidence in Pakistan’s commitment to economic reforms. The IMF board highlighted the stabilization of economic activity in Pakistan but stressed the challenging outlook dependent on sound policy implementation. It emphasized the importance of adhering to fiscal targets, maintaining a market-determined exchange rate, and progressing on structural reforms to support robust and inclusive growth.