Pakistan Stock Exchange moves even higher as privatisation dream is coming true
Business
Thrashes the 71,000 ceiling a day after by-election results indicated political stability
- The central bank is expected to review interest rates at its Monetary Policy Committee meeting next week
- Nawaz on his way to China with a focus on attracting foreign investment
KARACHI (Web Desk) – The Pakistan Stock Exchange saw its benchmark KSE-100 Index moving up by 0.74 per cent on Monday a day after Finance Minister Muhammad Aurangzeb promised to go ahead with the privatisation and complete the PIA transaction during the current fiscal year.
It also followed the by-election results which produced favourable results for the ruling alliance, thus giving a message that the chances of political stability and a stable government staying in power are growing.
The intraday day trading so far has also seen a buying spree in the case of national flag carrier whose share price also edged up by 7.52 per cent.
Read more: Improve tax collection or we will need another IMF package: Aurangzeb
However, the usual suspects – the oil and gas exploration and marketing companies as part of the broader energy-related businesses – as well as the commercial banks, cement and automobile assemblers continued propelling the market.
During the process, the KSE-100 Index thrashed the 71,000 ceiling and at one point touched an intraday high of 71,861.18, or around 1.20pc.
Meanwhile, the benchmark index settled at 71,433.46 after a net gain of 523.26 points by the time trading was closed for the day.
The surge coincides with the hopes of progress to be made in the talks to be held with the International Monetary Fund (IMF) in connection with the larger loan package under the Extended Fund Facility (EFF) and the request to grant additional financing under climate financing.
It means the investors are setting aside, at least for the time being, the uncertainty over the interest rate cuts as the State Bank of Pakistan’s Monetary Policy Committee is scheduled to meet on April 29.
Although the businessmen have been clamouring for slashing interest rates to revive the economy, there is very little hope the central bank going for the move next week despite the continuous decrease in inflation amid the fuel price hikes and the imminent increase in gas tariffs which will naturally sustain inflationary pressure.
Moreover, the chances of Federal Reserve starting the rate cut cycle have diminished to a level where it is expected the process won’t start until September amid the rising US inflation.
However, Aurangzeb last week in Washington had downplayed the effects of higher US interest rates on Pakistan.
On has to see in the coming days and weeks how the market behaves after the central bank’s decision on rate cuts and after the dream of Saudi investment materialises.
Read more: Nawaz to leave for China tonight. Dar is accompanying him
Meanwhile, former prime minister Nawaz Sharif is leaving for China tonight on a five-day visit, which is aimed at attracting Chinese investment, especially in Punjab where his daughter Maryam Nawaz is now the chief minister just like the two Sharifs, and ensure progress on CPEC which is more or less on a standstill since the removal of his government in 2017.
