PSX continues bullish run, crosses 56000 milestone

This surge followed a gain of 618 points, driven by several positive factors, including clarity on the election date and expectations of a favorable review from the International Monetary Fund (IMF).

The Pakistan Stock Exchange (PSX) 100 index was recorded trading at 56,010 at 10 a.m on Monday, the first day of the business week. On Friday, the KSE-100 index crossed the 55,000 points mark.

The ongoing upward movement is creating an impression that the market may soon witness a correction through profit-taking. But there are others who feel that the KSE-100 Index can reach new highs of over 58,000.

However, the developments in the coming sessions depend upon how the investors perceive the future and whether they expect the share value to climb, given the fact the stocks are still undervalued when compared with 2017 – the period which saw the market making huge gains which remained the record level till recently.

The local investors are buoyant by the expectation that there won’t be any more rate hikes given a declining inflation and a positive outcome of the ongoing talks with the International Monetary Fund (IMF).

The reason behind the investors rooting for a successful first review by the IMF of the $3 billion stand-by arrangement is that the privatisation of the state-owned enterprises (SOEs) has been seemingly getting nearer, being one of the main conditions set under the agreement.

Islamabad has already implemented the IMF demands – ranging from hiking the fuel prices to the power and gas tariffs while slashing subsidies – which are meant to reduce fiscal deficit. Thus, the privatisation of loss-making SOEs is naturally the next stage.