KSE-100 remains bullish after IMF approves second tranche for Pakistan

In this file photo, Pakistani stockbrokers sit near a share prices board during a trading session at the Pakistan Stock Exchange (PSX) in Karachi on Oct. 18, 2016. (AFP)
Updated 12 November 2019

KSE-100 remains bullish after IMF approves second tranche for Pakistan

  • Statistics show the stock market has given a return of 14.10 percent since July 1
  • Analysts believe Pakistan’s external position is comfortable now

KARACHI: Pakistan’s KSE-100 index continued its bullish steak for eighth consecutive sessions as it surged by 2.24 percent on Monday, witnessing a spike of 825 points, in the wake of the recommendation issued by the International Monetary Fund’s Pakistan mission to release the second tranche of $450 million for the South Asian country that is still grappling with economic challenges.
The longest bullish spell in a year was witnessed at the Pakistan bourse following “easing political noise, MSCI emerging market status quo and IMF affirmations over the achievement of First Quarter Performance Criteria by good margins,” Ahsan Mehanti, senior equity analyst, commented.
After the first review of the overall economic performance of the country under the IMF’s $6 billion bailout program, the Fund on Friday declared that the Pakistani authorities had met all performance criteria with comfortable margins.
Following the performance review, Pakistan and the IMF reached a staff-level agreement that paved the way for the second tranche of $450 million that the country expects in December this year.
Analysts say that amid the bullish spell, the equity market’s benchmark KSE 100 Index has witnessed a surge of about 7000 points from its lows. They add that the stock market has given a return of 14.10 percent since July 1.
“The external position of Pakistan seems comfortable now. The political tension has also defused, national saving scheme (NSS) rate cut and IMF review have played a vital role in putting the market on an upward trajectory,” Samiullah Tariq, Director Research at Arif Habib Limited, told Arab News.
On Monday, the market volumes increased from 210.6 million to 283 million shares, contributed mostly by banks, cement firms and the technology sector.
Pakistan’s capital markets are said to be attractive for foreign investors who had spent $675 million in treasury bills (T-Bills) and $3 million in Pakistan Investment Bonds (PIBs) by November 11, 2018.
However, the equity market witnessed outflows of $30 million since July 2019, according to the State Bank of Pakistan (SBP) and AHL Research.
During the past eight sessions, the domestic equity bourse rose by 9 percent or 3,042 points.
Previously, the market had exhibited such a trend on November 2, 2018, when it shot up by 11.4 percent or 4,289 points.


Saudi business chiefs back 2020 budget

Updated 42 min 27 sec ago

Saudi business chiefs back 2020 budget

  • 2020 spending plan hailed as a positive driver in boosting country’s economy

RIYADH: Saudi businesses have welcomed spending plans of SR1.02 trillion ($272 billion) next year, announced by King Salman.

The Council of Saudi Chambers praised the efforts of the monarch, Crown Prince Mohammed bin Salman and others in reaching an agreement on the 2020 budget.

The government has predicted revenues of SR833 billion and a deficit of SR187 billion for next year, considered an indicator of the success of the Kingdom’s economic policies amid a bleak global economic backdrop.

Chairman of the Council of Saudi Chambers Dr. Sami Abdullah Al-Abaidi said that the Saudi business sector was optimistic about the new spending plans.

“These figures reflect the effective impact of the economic reform measures, the economy’s restructuring and diversification of sources of income,” he added.

Al-Abaidi praised the king and the crown prince for supporting the Saudi economy through numerous projects and initiatives aimed at boosting the business sector.

He said the most notable were business performance improvement initiatives, privatization, private-sector stimulation and local promotion programs.

“This has paved the way for the Kingdom to get the best international classifications, including its first world ranking in business environment reforms, which made it a hub for investments,” Al-Abaidi added.

The business chief reiterated King Salman’s determination to continue implementing reforms, diversifying sources of income, making optimal use of resources, empowering the private sector, and improving transparency and efficiency in government spending to boost growth rates.

“These trends are one of the most important requirements for achieving the Kingdom’s Vision 2030,” he said.

The council’s vice chairman, Muneer bin Saad, said the budget for the new year focused on investing in the human element and sectors that directly affected the lives of citizens, including the development of services.

Saad added the monarch had directed to extend the disbursement of the cost of living allowance until the end of 2020.

Council member Abdullah Al-Odaim said the budget met the expectations of Saudi citizens, and strengthened the confidence of international investors, as figures showed the determination of the state to move forward in its policies to raise the efficiency of government spending.

They also showed increases in non-oil revenues, projected to grow more in light of the improvement of economic activity.

The delegated secretary-general of the Council of Saudi Chambers, Hussain Al-Abdulqader, said the Saudi business sector welcomed the budget which through
its projects and programs would help improve investment opportunities as well as the Saudi economy, ultimately strengthening the Kingdom’s global economic standing.