The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) opened in the green with a gain of over 600 points in morning trade on Monday.
According to the PSX website, the exchange saw an increase of over 450 points as of 9:45 am. At 10:40 am, the index was up 683 points or 1.66 per cent at 41,734.31.
The index crashed on Friday after falling over 2,000 points or 4.8pc in the morning session, following the government’s announcement of a 10pc “super tax” on large-scale industries including cement, steel, sugar, oil and gas. The rally came Fertilizers, LNG Terminals, Textiles, Banking, Automobiles, Chemicals, Beverages and Cigarettes.
Salman Naqvi, Head of Research, Aba Ali Habib Securities, attributed today’s rally to several factors as well as encouraging news.
“Pakistan hopes to receive a letter from the IMF today after which the loan agreement will be finalised,” he said. don.com,
He continued, a Chinese debt roll-over of $2.3 billion was also accumulated, which improved investor sentiment. “We are also in talks with Saudi Arabia regarding deferment of oil payments,” Naqvi said.
Ehsan Mehnty of Arif Habib Corporation said a sharp recovery was seen in stocks ahead of the budget’s approval this week to restart the IMF bailout programme.
“The increase in global equity and the possible approval of Saudi Oil’s deferred payment facility of up to $3.6 billion in payments played a catalyst to the bullish activity,” he said.
Meanwhile, Raza Jafri, head of research at Intermarket Securities, was of the opinion that receipt of $2.3 billion in commercial loans from China was “helping to lift the balance of payments and sentiment in the KSE-100”.
He continued that there was also a feeling that Friday’s decline was “overdone” due to the one-time heavy taxation on some sectors, particularly the bringing of the IMF program to a close.