IMF Mission Visit Boosts Pakistan's Stock Market

Pakistan's stock market showed a significant uptrend on Monday, with the benchmark index rising by 1.5% to reach an intraday high of 72,986 points. Over the past year, the index has witnessed a remarkable surge of 73.4% and is currently up by 12.9% year-to-date.

The positive momentum in the market was attributed to the visit of a Saudi delegation to Pakistan for discussions on trade and investment opportunities, particularly focusing on the exploration and production sectors. Adnan Sheikh, assistant vice president at Pak Kuwait Investment Company, highlighted that the market reacted positively to the news of the delegation's arrival and an encouraging statement from the International Monetary Fund (IMF) regarding an upcoming mission visit.

Sheikh emphasized that the Pakistan Stock Exchange (PSX) remains attractively priced, with a price to earnings ratio below 5x compared to the average of 8x. Despite recently completing a short-term $3 billion program to avert sovereign default, the government under Prime Minister Shehbaz Sharif is emphasizing the necessity of a new longer-term program.

An IMF mission is scheduled to visit Pakistan this month to engage in discussions about a potential program. Finance Minister Muhammad Aurangzeb expressed optimism about reaching an agreement on a new IMF loan in May, with Pakistan expected to seek a loan of at least $6 billion and additional financing from the Fund under the Resilience and Sustainability Trust.

In conclusion, Pakistan's stock market continues to demonstrate resilience and attract investor interest amidst ongoing economic developments and negotiations with international financial institutions like the IMF.