Stocks hit a new all-time high above the 94,200 mark on Thursday amid high expectations of a soft landing for the economy, following reports that the International Monetary Fund (IMF ) would probably not push Pakistan to introduce a mini-budget.
At 12:22 p.m., the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index surged 865 points, hitting a record high of 94,225 points.
Khurram Schehzad, CEO of Alpha Beta Core, suggests that investor optimism is driven by the ongoing review by the IMF team, pushing the market into uncharted territory.
Schehzad notes that this increases the likelihood that Pakistan will successfully complete the $7 billion Expanded Financing Facility (EFF) deal.
The IMF mission, which arrived in Islamabad on November 11 after meetings with Pakistani authorities, reportedly welcomed an increase in the tax-to-GDP ratio of almost 1.5 percentage points – a significant achievement by the Federal Economic Bureau. Revenue (FBR).
This improvement means that there is no immediate need for additional tax measures via a supplementary finance bill.
It is worth noting that the IMF had earlier set a target for Pakistan to increase its tax revenue by 1.5% of GDP in the financial year 2024-25, aiming for a total increase of 3% throughout the 37 month of the program.
Last week, News reported that an IMF delegation would hold talks with Pakistan next week following major “deviations” from performance targets and may urge Islamabad to present a mini-budget for a “course correction”. The unscheduled visit and negotiations are too early for the IMF’s first review, scheduled for the first quarter of 2025.
Commenting on the rally, Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, said stocks hit a new all-time high led by blue-chip scripts on strong long-term earnings prospects.
“The stable rupee, easing fears over the mini-budget and lower bank interest rates have triggered a sharp rise in the country’s capital market,” Mehanti added.
It was a prime buying party today as sectors such as commercial banks, oil and gas exploration, oil marketing companies and power generation stole the show.
Major support came from heavyweights including MCB Bank, Meezan Bank Limited, National Bank of Pakistan, Hub Power Company, Mari Petroleum Company, Oil & Gas Development Company, Pakistan Petroleum Ltd and Sui Northern Gas Pipelines Limited.
This is a developing story and is being updated with more details.