November 21, 2023 (MLN): Owing to positive sentiment stemming from the successful staff-level agreement (SLA) between the International Monetary Fund (IMF) and Pakistani authorities during the first review under Stand-By Arrangement (SBA), the local unit and bourse have been witnessing a notable upswing.
After enduring 17 consecutive days of downward pressure, the Pakistani Rupee (PKR) broke free from its losing streak on Thursday, showing signs of resilience and marking notable gains.
The gains have extended this week, with the local unit appreciating by 47 paisa against the greenback during today's intraday trade compared to the previous closing of PKR 285.97 per USD.
The PKR was quoted at PKR 295.5/ 286 [10: 24 am PST] with the trades being reported at 285.5 per USD.
In the statement issued by the IMF on the approval of the SLA, the fund highlighted that while inflows following increased regulatory and law enforcement helped normalize import and FX payments and rebuild reserves, the authorities recognize that the rupee must remain market-determined to alleviate external pressures and rebuild reserves sustainably.
To support this, they plan to strengthen the transparency and efficiency of the FX market and refrain from administrative actions to influence the rupee.
Moreover, as per Bloomberg's latest report, the local unit's outlook is expected to improve following the International Monetary Fund’s preliminary approval for the release of the next loan tranche under the current $3bn loan program.
Apart from benefitting the local currency, this favorable development also extends to the Pakistan Stock Exchange (PSX), fostering an optimistic shift in market sentiments.
The benchmark KSE-100 Index has surged by 398.12 points so far [10:32 am PST] and is currently trading at 57,479 points.
Sectors propping up the Index are Commercial Banks with 123.18 points, Fertilizer with 47.13 points, Oil and Gas Exploration Companies with 36.0 points, Cement with 31.14 points, Oil and Gas Marketing Companies with 25.12 points, and automobile assembler with 25.10 points.
While the companies adding points to the index were UBL with 43.37, MEBL with 40.20, PSO with 26.08, ENGRO with 22.87, and MTL with 20.39 points.
This surge comes after the local bourse stood firm in yesterday’s trading session, closing at 57,077.96 with a marginal uptick of 14.80 points or 0.03%.
However, the local market experienced a significant decline on Friday, with market sentiments heavily impacted by alarming inflation figures revealing a staggering week-on-week increase of nearly 10% due to the 480% hike in gas prices.
The market has strongly rebounded today with a renewed sense of confidence, experiencing a notable surge.
Copyright Mettis Link News
Posted on:2023-11-21T10:12:17+05:00
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