PSX extends gains as Pakistan-IMF clinch staff-level agreement

The Pakistan Stock Exchange (PSX) surged on Wednesday as investor confidence strengthened following the announcement of a staff-level agreement (SLA) between Pakistan and the International Monetary Fund (IMF).

During the session, the KSE-100 Index touched an intraday high of 167,561.69 points, gaining 2085.67 points or 1.26%.

However, the equity market settled at 165,686.38 points, up 210.36 points, or 0.13%, from the previous close of 165,476.02.

Market analysts said the IMF deal has reinforced investor confidence and eased uncertainty surrounding the country’s economic outlook.

Independent economic analyst AAH Soomro noted that the market was excited over lesser political noise domestically and on the Afghan border, adding that the successful conclusion of IMF talks was the key driver behind the rally.

"The index should consolidate here until the current account data is released and will be driven by earnings season,” he added.

Ahfaz Mustafa, CEO of Ismail Iqbal Securities, said the market has continued its optimism from yesterday, with the news of Pakistan and IMF reaching an SLA. “This, coupled with the upcoming corporate results, will continue to keep the market buoyant,” he added.

A day earlier, the benchmark KSE-100 index posted its second-highest single-day gain, adding 7,033 points to close at 165,476.

The International Monetary Fund (IMF) said on Tuesday it has reached a staff-level agreement with Pakistan on its loan programme, which would allow the country to access $1.2 billion after a review.

Subject to a board review, the IMF will provide Pakistan $1 billion under its Extended Fund Facility (EFF) and $200 million under its Resilience and Sustainability Facility (RSF), bringing total disbursements under the two arrangements to about $3.3 billion.

According to the IMF, discussions led by Iva Petrova were held in Islamabad between September 24 and October 8 to review progress under Pakistan’s ongoing economic programmes — the 37-month Extended Arrangement under the EFF and the 28-month arrangement under the RSF.

"Supported by the EFF, Pakistan’s economic programme is entrenching macroeconomic stability and rebuilding market confidence. The recovery remains on track, with the FY25 current account recording a surplus — the first in 14 years," the IMF said in a statement.

The lender also acknowledged that Pakistan has remained firm in implementation of the EFF-supported programme, saying, "The authorities are committed to sustaining the fiscal effort to strengthen public finances while providing needed support to the victims of the recent floods; ensuring inflation remains durably within the SBP's target range; restoring the viability of the energy sector; and advancing structural reforms.”