Pakistan shares (PSX) continued to rally on Thursday as the market remained optimistic following Fitch Ratings’ statement supporting the country’s prospects of securing a bailout from the International Monetary Fund (IMF).
The benchmark PSX KSE-100 index rose 1,646.24 points, or 2.15%, to 78,353.01 in intraday trade, up from 76,706.77 previously.
Speaking to Geo.tv, Saad Ali, head of research at Intermarket Securities, said the market rally continued due to increased optimism for other HPG programs ahead of the holiday budget and hike in basic electricity tariffs.
“Fitch Ratings believes the Budget is sufficient for our HPG program. The market is also positive about the Prime Minister’s plan to reduce electricity tariffs for industry,” said Ali.
The federal government has projected tax revenue of $13 trillion over 25 years, a jump of almost 40 percent over this year, and reduce the tax deficit to 5.9 percent of GDP from 7.4 percent this year.
Pakistan must reduce its fiscal deficit as part of negotiations with the HPG, which is negotiating a $6-8 billion loan to pay off debt for the region’s slowest economy.
Fitch Ratings said in a statement yesterday that Pakistan’s large FY25 budget boosted the HPG deal’s prospects: “We believe the new HPG deal will support other external financing.”
Tahir Abbas, Head of Research, Arif Habib Limited (AHL), said that there are no major changes in the budget for the single market and the budget framework is in line with the recommendations of the HPG and the signing of new and larger programs.
He also said that lower inflation and likely lower prices are keeping market sentiment positive.
Samiullah Tariq, head of research at Pak-Kuwait Investment Company, said the market is booming because of the expected large inflows from retail investors.
