Business

Bulls take charge on PSX after Pakistan clinches IMF deal

Published

11 months ago

Farwa

KARACHI: Pakistan Stock Exchange (PSX) Monday witnessed a bullish trend as the KSE-100 benchmark index crossed 2,000 points after the government reached a consensus with the International Monetary Fund (IMF) on a bailout package.

The index opened in the green zone and remained positive throughout the session before the trading was halted for an hour after the index hit its upper circuit limit of 5% at around 9:30am. The trading resumed at around 10:37pm.

When the market opened today, after Eid holidays break, it surged a record 2,231.1 points to 43,683.78 points, rising more than 5%, which forced the suspension.

As the trading resumed after an hour’s suspension, the benchmark index surged to 43,923.71 points — an increase of 5.96% or 2471.03 points — at around 11:20am.

Pakistan secured a badly-needed $3 billion short-term financial package — subject to approval by the IMF board in mid-July — on Friday, giving the South Asian economy a much-awaited respite as it teeters on the brink of default.

Speaking to Geo.tv, Pakistan-Kuwait Head of Research Samiullah Tariq said the market is performing due to the IMF deal and the reduction of the uncertainty on the balance of payments front.

The loan is a lifeline for Pakistan as it gives a nine-month roadmap to the nation, which is facing one of its worst economic and political crises on record.

Ecohing Tariq, Arif Habib Limited’s Head of Research Tahir Abbas also said that the rally is primarily due to the staff-level agreement with the IMF.

When asked whether the rally would be short-lived, Abbas said: “No, the momentum and sentiment are very positive given now the country has an economic roadmap ahead for the next nine months.”

The KSE-100 index had become the world’s cheapest equity benchmark, according to Bloomberg, as concerns regarding political turmoil and a risk of default had sent investors fleeing.

Islamabad also faces a payment of $23 billion in external debt obligations during the fiscal year, which started in July — and is almost six times more than the State Bank of Pakistan’s $4 billion forex reserves.

PM felicitates business community

In response to the surge, Prime Minister Shehbaz Sharif felicitated the business community and the nation.

He said as a result of a staff-level agreement with the IMF, the trust of investors and the business community was rapidly reviving.

In a statement issued by the PM Office, Shehbaz said the government’s continued struggle and prudent policies had started bearing fruits as signs of the country’s economic revival were rising.

“We are resuming the journey of economic development and decline in the inflation rate from the point where Quaid Muhammad Nawaz Sharif had left.” he said.

“Thanks to God, the country has been put on the path of development again, he said adding that after severe disappointments, a new sun of hope is rising again.”

Business

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

Published

2 days ago

Farwa

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.

Business

Pakistan and the IMF begin talks for a new loan.

Published

2 days ago

Farwa

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.

Business

Petrol prices are likely to drop significantly beginning May 16.

Published

2 days ago

Farwa

According to sources, the government is set to decrease petrol prices by Rs 14 per litre and diesel prices by Rs 10 on May 16 for the next fortnight’s revision.

Last month, the government reduced the price of fuel and high-speed diesel by Rs5.45 and Rs8.42 per fortnight, respectively.

The current fuel price is Rs288.49 per litre, while the HSD price is Rs281.96.

Meanwhile, oil prices fell further on Monday, as signs of sluggish fuel consumption and comments from U.S. Federal Reserve officials dimmed optimism for interest rate reduction, which may slow growth and reduce fuel demand in the world’s largest economy.

Brent crude prices down 25 cents, or 0.3%, to $82.54 a barrel, while US West Texas Intermediate crude futures fell 19 cents, or 0.2%, to $78.07 per barrel.

Oil prices also declined on signals of poor demand, according to ANZ analysts, as gasoline and distillate inventories in the United States increased in the week before the start of the driving season.

Refiners throughout the world are dealing with falling diesel profitability as new refineries increase supply and warm weather in the northern hemisphere and weak economic activity reduce demand.