Pakistan shares hit fresh record on rate cut hopes, IMF talks
Pakistan's benchmark share index touched a lifetime high on Wednesday, breaching the key level of 75,000, on hopes that easing inflation could pave the way for interest rate cuts as early as June.
Pakistan's benchmark stock index hits record high of 75,000 on easing inflation, potential interest rate cuts, IMF talks, and foreign investment optimism.
Still attractive stock valuations, expectations of more foreign inflows, and the start of talks with the IMF on a new loan programme added to the bullish sentiment.
The index was trading at 75,013 points at 0531 GMT, up 0.7 per cent, after hitting an intraday high of 75,115. It has surged 80 per cent over the past year, and it is up 16.1 per cent year-to-date after
On Tuesday, the MSCI index added a Pakistani bank, National Bank of Pakistan , to the MSCI frontier market index. Its shares rose 1.6 per cent on Wednesday, outperforming the benchmark index.
"We estimate Pakistan's weight will also increase, thereby having the potential to attract more passive foreign funds," said Sohail.
The market is picking up steam due to an anticipated decline in inflation to 13.5 per cent for May and expectations of a monetary easing cycle starting in June, said Shahid Habib, CEO of Arif Habib Limited.
Investors were also optimism about discussions on a new International Monetary Fund financing program and the economic roadmap ahead, Habib said.
Pakistan last month completed a short-term, $3 billion IMF programme, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term programme.
An IMF mission is in Pakistan to discuss the financial year 2025 budget, policies, and reforms under a potential new programme.
Wall Street bank Citi expects Pakistan to reach a four-year agreement with the IMF worth up to $8 billion by end-July, and recommends going long on the country's 2027 international bond.
Source: www.channelnewsasia.com
