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PSX closes range-bound session in green

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  • Market manages to close with minimal gain of 174.75 points or 0.43%.
  • Benchmark KSE-100 index closes at 41,054.68 points.
  • Shares of 315 companies were traded during session.

KARACHI: The Pakistan Stock Exchange (PSX) Tuesday witnessed a range-bound session despite negative cues that dented sentiments of other financial markets. 

The stock market opened in the green, however, it soon succumbed to the selling pressure as the bears staged a comeback and held a firm grip during the session. However, the market managed to close with minimal gains. 

At close, the benchmark KSE-100 index closed at 41,054.68 points with a gain of 174.75 points or 0.43%.

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

According to Arif Habib Limited, the PSX observed a positive session due to the expectations of Pakistan’s exclusion from the grey list of Financial Action Task Force (FATF). 

The KSE-100 index stayed in the green zone as investors opted for value hunting in the oil marketing companies (OMCs), exploration and production and cement sectors. 

The volumes remained sluggish on the main board whereas third-tier stocks witnessed healthy volumes.

Sectors contributing to the performance include Banks (+52.6 points),  exploration and production (+43.2 points), OMCs (+32.1 points), technology (+28.4 points) and fertiliser (+15.6 points).

Shares of 315 companies were traded during the session. At the close of trading, 163 scrips closed in the green, 128 in the red, and 24 remained unchanged.

Overall trading volumes rose to 120.12 million shares compared with Monday’s tally of 163.79 million. The value of shares traded during the day was Rs3.36 billion.

Unity Foods Limited was the volume leader with 8.18 million shares traded, losing Rs0.12 to close at Rs20.05. It was followed by K-Electric Limited with 7.42 million shares traded, gaining Rs0.02 to close at Rs2.57 and Hum Network Limited with 7.27 million shares traded, gaining Rs0.08 to close at Rs7.16. 

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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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