KARACHI: The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) rose over 1,000 points as the country is expected to sign an agreement with the International Monetary Fund (IMF) to unlock much-needed funds. .
The benchmark index rose to 1,033.02 at 10:47 a.m. as the market speculated that Pakistan could refinance its frozen IMF loan to avoid a sovereign default.
Capital market expert Saad Ali told JEE News that the revised budget has restored hope among market stakeholders after the government added new taxes in the Finance Bill 2023-24.
“The revised budget coupled with additional tax measures have revived market hopes for a resumption of the IMF program as the new budget may meet the IMF’s condition for adequate fiscal contraction,” he said.
Samiullah Tariq, head of research at Ekung Ali, Pakistan-Kuwait Investment Company, said “optimism” over the IMF deal resulted in today’s market rally.
Tariq also believes that the Pakistani authorities and the IMF could sign a Staff Level Agreement (SLA) within this week.
The National Assembly on Sunday unanimously passed the Finance Bill 2023-24 with a revised outlay of Rs 14.48 trillion after adopting certain amendments in the proposed budget measures.
In a last-ditch effort to secure a stalled rescue package with the IMF, the government introduced a number of changes in the fiscal year 2024 budget.
The decision to revise the budget was taken after Prime Minister Shehbaz Sharif met with IMF Managing Director Kristalina Georgieva on the sidelines of the Global Financing Summit in Paris.
The 2019 IMF Extended Fund Facility (EFF) expires on June 30 with about five days to go.
Under the ninth review of the $6.5 billion facility, negotiated earlier this year, Pakistan is seeking to receive $1.1 billion in funding that has been stalled since November.
