On Friday, shares at the Pakistan Stock Exchange (PSX) surged over 800 points, following the State Bank of Pakistan’s (SBP) 200 basis point cut in its key policy rate. By 11 a.m., the KSE-100 index had risen by 868.08 points, or 1.1%, reaching 79,857.77 from the previous close of 79,017.61.
Awais Ashraf of AKD Securities noted that investor enthusiasm was driven by the IMF’s forthcoming meeting and the SBP’s aggressive rate cut. The IMF confirmed its board would meet on September 25 to discuss the new Extended Fund Facility (EFF).
Mohammed Sohail from Topline Securities stated that the IMF meeting date and the rate cut boosted market sentiment, though concerns about potential foreign selling due to FTSE rebalancing moderated the rally.
Yousuf M Farooq of Chase Securities linked the rally to the IMF board meeting announcement and the larger-than-expected rate cut, while also noting that FTSE rebalancing and anticipated foreign selling have tempered the market’s rise. He anticipates a broader market upturn over the next year, given the stabilizing effects of the new IMF program.
Shahab Farooq from Next Capital Limited attributed the rally to the unexpectedly high rate cut and the IMF board review date announcement, which had previously caused concern and uncertainty. He added that positive statements from the finance minister and the SBP governor about external accounts and inflation trends could further boost investor confidence, despite ongoing concerns about potential fiscal issues and the possibility of a mini-budget.
