Daily Times

There was an improvement in investor confidence on Friday at the Pakistan Stock Exchange (PSX), as the benchmark KSE-100 index on the PSX closed the day up 410.60 points, boosted in part by optimism that Pakistan will be removed from the Financial Action Task Force’s (FATF) grey list.

Additional assistance was provided by market expectations that Pakistan and the International Monetary Fund (IMF) had reached a staff-level agreement for the distribution of the next tranche of $6b in the Extended Fund Facility (EFF). A total of 690.48 points were added to the index from the previous day’s close of 41,730.16 to reach 42,420.64 around 3:07 pm.

This week, Pakistan’s government cut fuel subsidies and raised oil prices to placate the International Monetary Fund. As a condition for receiving the next instalment of the loan, the global lender required the removal of the subsidy. In the meantime, the FATF put Pakistan on its grey list in 2018 after finding flaws in Pakistan’s action plan to combat money laundering and terrorism financing.

Once Pakistan met those terms, the organization issued an ultimatum. As of 2021, Pakistan has implemented 26 of the FATF’s 27 recommendations and six of the APG’s seven recommendations. The first session of trading ended with a 521-point gain as the market rallied to start strong. First thing in the morning the KSE-100 index continued to rise, but profit-taking started to occur in the last few hours of trading and wiped out some of its gains.’ Investors rushed to take new positions in all index-heavy sectors, resulting in a modest amount of buying activity. On Friday, a report from Capital Stake stated that the PSX had been taken over by bulls.

All day long, the indices continued to rise, while the volume surged from the previous day’s close. There has been a $234m drop in Pakistan’s liquid foreign exchange reserves over the past week. With a decrease of $241m to $8.985b in net reserves at the State Bank of Pakistan (levels last seen in November 2019).

Oil and gas exploration (88.92 points), banking (82.72 points), and cement were the top three sectors driving the KSE-100 index higher (45.75 points).

The total number of shares traded rose to 282.9m from 162.18m on Thursday, a significant increase in trading volume. In the previous session, the value of shares traded was only Rs4.78b, but this time it was Rs9.06b. There were 31.93m shares of Cnergyico PK, followed by 17.7m shares of Hum Network, and 17.1m shares of Pak Refinery in the total volume of shares traded. On Friday, 353 companies’ shares were traded, with 238 seeing their prices rise, 95 seeing their prices fall, and 20 seeing their prices stay the same.