Pakistan stocks hit all-time high on IMF review success, election announcement
22 November 2023
Published in: Arab News
KARACHI: Pakistan’s stock market hit an all-time high on Wednesday on the back of a staff-level agreement reached last week with the International Monetary Fund (IMF) on the first review of a $3 billion bailout, which will unlock $700 million in funding for the cash-strapped country.
Pakistan’s benchmark share index, the KSE 100 index, gained 827 points to close at 58,198, another all-time high in one of the fastest recoveries witnessed at the Pakistan Stock Exchange (PSX).
The benchmark index has gained over 13,000 points or 29 percent since September this year, according to PSX data.
Pakistani financial experts attribute the historic growth to the completion of the first review of the IMF program and an expected cut in inflation and interest rates, as well as the expectation of political stability in the coming months as general elections are scheduled to be held in February.
“Investors at PSX think that the inflation and interest rates have peaked out, which would push the monetary easing cycle into motion as early as January 2024,” Tahir Abbas, head of research at Arif Habib Limited, told Arab News.
Abbas said the profitability of listed companies at PSX was continuously increasing but market valuation had not increased comparatively.
“The PE [price to earning] ratio which was 11.5 times and now is 4.3 times, which shows that the market is still attractive for investors,” he added.
“The completion of the first review of the IMF program and expected inflows of $700 million from the fund is also playing a contributing role in the upsurge of the stock market,” Samiullah Tariq, director research at Pakistan Kuwait Investment Company, told Arab News.
