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Bulls stage comeback at PSX on Ishaq Dar’s cues

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  • Investors cheer Dar’s assurance Pakistan will not seek debt restructuring from Paris club.
  • Benchmark KSE-100 index traded between hope and despair.
  • Investors kept a close watch on SBP’s decision on monetary policy.

KARACHI: The bulls staged a comeback at the Pakistan Stock Exchange (PSX) on Monday cheering Finance Minister Ishaq Dar’s assurance that Pakistan will not seek debt restructuring from the Paris club.

Constant assurance from the top leadership that Pakistan will not seek debt restructuring from Paris Club creditor nations enticed market participants. 

Moreover, Dar dismissed market rumours that the government might extend maturities for its bonds, saying that the country will fulfil all multilateral, international and bond obligations.

The benchmark KSE-100 index traded between hope and despair, which eventually let loose the bulls, who pulled the bourse into the green.

Investors kept a close watch on the State Bank of Pakistan’s decision on the monetary policy — which was later kept unchanged at 15% for the next seven weeks.

The KSE-100 index gained since the morning bell rang, but some dips were seen at regular intervals. The downtrend turned steeper at midday bulls managed to regain control.

The benchmark KSE-100 index closed at 42,211.64 points with an increase of 126.39 points or 0.30%.

Benchmark KSE-100 index intra-day trading curve. — PSX data portal
Benchmark KSE-100 index intra-day trading curve. — PSX data portal

Topline Securities in its post-market commentary noted that the KSE-100 index largely traded in the positive zone due to Dar’s statement regarding Pakistan not planning to seek a debt restructuring.

Shares of 336 companies were traded during the session. At the close of trading, 161 scrips closed in the green, 149 in the red, and 26 remained unchanged.

Overall trading volumes declined to 240.19 million shares compared with Friday’s tally of 313.34 million. The value of shares traded during the day was Rs10.53 billion.

Worldcall Telecom was the volume leader with 31.15 million shares traded, gaining Rs0.03 to close at Rs1.63. It was followed by Pak Elektron with 27.14 million shares traded, gaining Rs1.21 to close at Rs17.45 and TRG Pakistan with 26.74 million shares gaining Rs7.29 to close at Rs151.43.

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The International Monetary Fund (IMF) and Pakistan have initiated discussions at the policy level.

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The International Monetary Fund (IMF) and Pakistan will commence policy-level discussions today (Monday), as financially-strained Islamabad aims to secure another agreement with the Washington-based lender while satisfying all the stringent requirements associated with it.

The negotiations will primarily focus on deciding the magnitude of the upcoming IMF programme, establishing the corresponding terms and conditions, and defining the objectives and aims for the next budget.

Simultaneously, both parties will establish the macroeconomic objectives for the upcoming fiscal year’s budget. The IMF is determined to enforce policies such as monetary tightening (raising interest rates), increasing energy tariffs, adopting a market-based exchange rate, and implementing privatisation.

The expectation is that both parties will conclude the negotiations during the current week and finalise a staff-level agreement, which will then be subject to the ultimate approval of the IMF Executive Board.

A significant number of experts argue that the International Monetary Fund (IMF) has proposed a misguided policy of increasing interest rates, which has severely damaged the economy of the country. Consequently, it is imperative for the State Bank of Pakistan to promptly initiate a cycle of reducing interest rates.

They believe that the existing monetary policy will result in an overwhelming accumulation of debt and taxes, which will hinder the revival of economic activity and investment. This outcome has already been evident to all.

Despite the prevailing cost of living crisis in Pakistan, the IMF is insisting on raising the minimum energy bill, citing its necessity in managing the escalating circular debt.

However, due to the stringent conditions imposed by the IMF and Pakistan’s inability to address the issues in the energy sector, as well as the nature of agreements made with independent power producers (IPPs), the country is unable to benefit from the decline in global prices of solar panels and related equipment.

Further information: Should I choose solar power or not? The inefficiency of the energy sector provides a compelling reason to reconsider the solar energy policy.

Pakistan and the MF initiated discussions on both the Extended Fund Facility (EFF) and climate funding. Pakistan is seeking a larger and more extensive bailout package to stabilise and revitalise its economy.

According to sources, it has been stated that the two parties have reached an agreement on the significant objectives outlined for the forthcoming budget, which encompass the punctual settlement of foreign debt obligations.

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Pakistan’s gold prices are still declining; see the most recent

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The price of 10-gram gold reduced by Rs943 to settle at Rs207,733, while the price of gold dropped by Rs1200 to close at Rs242,300 a tola, according to the Sindh Sarafa Jewellers Association.

In the global market, the price of the precious metal fell by $10 to $2,349 per ounce, resulting in losses.

At 04:48 GMT, the spot price of gold had dropped by 0.2% to $2,354.77 per ounce. In the previous session, prices reached a two-week high.

American gold futures dropped 0.6% to $2,361.

Spot silver decreased by 0.4% to $28.03 per ounce, while palladium remained steady at $978.03 and platinum decreased by 0.1% to $992.89.

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Pakistan and the IMF begin talks for a new loan.

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Pakistan is requesting a $6 to $8 billion bailout package from the international lender over the next three to four years to address its financial troubles.

A mission team led by Nathan Porter, the IMF’s Mission Chief in Pakistan, is meeting with a Pakistani delegation led by Finance Minister Muhammad Aurangzeb.

According to sources familiar with the situation, Islamabad may face more difficult options, such as raising power and gas bills.

Mr. Aurganzeb informed the IMF team that the country’s economy has improved as a result of the IMF loan package, and Islamabad is ready to sign a new loan programme to further develop.

The IMF mission expressed satisfaction with Islamabad’s efforts to revive the country’s struggling economy.

The IMF praised Pakistan’s economic growth in its staff report earlier this week, but warned that the outlook remains challenging, with very high downside risks.

The country nearly avoided collapse last summer, and its $350 billion economy has stabilized since the end of the last IMF program, with inflation falling to roughly 17% in April from a record high of 38% last May.

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