Islamabad: Pakistan’s stock benchmark was on track to hit a record high on Friday as the economy continues to improve after the nation secured a deal with the International Monetary Fund.
The KSE-100 Index rose as much as 0.5 per cent to 52,965.86, topping the last record close of 52,876.46, which was reached in May 2017. Textile shares led gains on Friday.
The South Asian nation avoided a default by securing a last-minute deal with the International Monetary Fund in July that has helped ease a dollar crunch and unlock further funding. That’s as large-scale manufacturing showed growth in August for the first time in 14 months. What’s more, the country’s economic growth is estimated to be 2.5 per cent for the year started July after a rare contraction last year, according to the IMF.
Pakistan has also launched operations against currency hoarders that boosted its rupee 8 per cent since September to make it the best-performing currency globally, according to data tracked by Bloomberg. The country’s dollar bonds have surged nearly 90 per cent in the past year, as the IMF’s bailout spurred optimism over its fiscal recovery.
Further helping send stocks higher, the State Bank of Pakistan held its benchmark interest rate for a third straight meeting in October, with analysts expecting that rates have reached a peak. Pakistan also has more political clarity after national elections were scheduled for February 8 after a delay.
The market’s momentum is going to be dictated by an ongoing IMF review for a second loan payment in December, alongside the fate of the upcoming elections, Omer Chaudhry, analyst at AKD Securities said in a report. “Overall, we keep advising our clients to take a cautious approach and investments should be made in sectors with dollar denominated revenues such as energy explorers or technology sector or companies with healthy dividend yields.”