Pakistan stocks witness week of highest gains in two years as political uncertainty subsides

KARACHI: Pakistan’s equities on Friday ended the weekly trading session on a bullish note, with the benchmark KSE100 index posting 4.9 percent gains, analysts said, describing it as the highest growth in two years on a weekly basis.
The index rose by 4.9 percent or 2,157 points — the highest gain since 2020 — during the week to close at 46,602 points, mainly after political uncertainty subsided with the election of Shehbaz Sharif as the prime minister of Pakistan earlier this week.
“This gain can largely be attributed to the end of political uncertainty as Shehbaz Sharif was elected as the prime minister in place of Imran Khan, who was removed from his office through a no-confidence vote in parliament,” said Nabeel Haroon, senior manager for international equity sales at the Karachi-based Topline Securities brokerage house.
“Investor confidence increased, as they believed that due to filling of political void, Pakistan could now again negotiate with the IMF (International Monetary Fund) for the resumption of the ever-important loan facility amid declining forex reserves.”
The South Asian country is in the midst of a $6 billion IMF bailout program and is yet to clear its seventh review that would release around $1 billion.
Pakistan’s stocks opened the week on a high note by scoring the highest ever single-day gains as the KSE100 index surged by 3.8 percent or 1,700 points. The weekend session posted positive gains too, with the index surging 117 points on Friday.
“Stocks closed higher on speculation over possible revival of the IMF program, surge in global crude oil prices and $2.8 billion record remittances in March 2022,” Ahsan Mehanti, CEO of Arif Habib Corporation, commented.
“Upbeat data on large industries’ growth at 8.4 percent and the rupee’s stability played a catalyst role in bullish close.”
During the week, the average trading volume and value also respectively increased by 213 percent and 133 percent to 477.3 million shares and Rs12.1 billion, according to Topline Securities report.
Despite dwindling foreign exchange reserves, Pakistan’s national currency has appreciated by around 3 percent during the week, due to clarity on the political front.
During the week ending on April 08, Pakistan’s official reserves decreased by $ 470 million to $10.8 billion, mainly due to external debt repayments, according to the State Bank of Pakistan.
The US dollar on Friday closed at Rs181.58 in the interbank market as compared to the previous close of Rs181.69. In the open market, however, the rupee remained under pressure and the greenback traded at Rs182 for selling against Rs181.80 previously.
Sharif, the incumbent prime minister, has vowed to resume talks with the IMF for the completion of the seventh review of the $6 billion loan program, which if completed would allow the South Asian country to draw $1 billion from the fund.
Pakistan is also expected to receive $2.3 billion from China after the Beijing rolled over the amount.

Pakistan stocks witness week of highest gains in two years as political uncertainty subsides