Bulls return to PSX after IMF loan approval, policy rate cut

• At the time of filing this report at 11:00 AM, the KSE-100 Index was being traded at 32,874.32 points.
• The BR100 Index was being traded at 3,381.03 points

After days of mundane activity at the bourse, the Pakistan Stock Exchange (PSX) saw a return of the bulls with the benchmark KSE-100 Index jumping over 1,500 points in the opening hours of trade on Friday.

At the time of filing this report at 11:00 AM, the KSE-100 Index was being traded at 32,874.32 points showing an increase of 1,544.86 points and a percentage change of 4.93pc. It may mentioned here that the trading was suspended for one hour.

Meanwhile, the BR100 Index was being traded at 3,381.03 points witnessing a jump of 177.27 points or a percentage change of 5.53pc.

The market rise comes just a day after the International Monetary Fund (IMF) on Thursday said its executive board had approved $1.386 billion in emergency financing to Pakistan to meet balance of payments needed stemming from the novel coronavirus pandemic.

The funds, to come from the IMF's Rapid Financing Instrument, will help Pakistan deal with a decline in international reserves and allow it to fund targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact, the IMF said.

IMF First Deputy Managing Director Geoffrey Okamoto said “expeditious donor support was needed to close the remaining balance of payments gap and ease the adjustment burden."

Furthermore, the Monetary Policy Committee (MPC) of State Bank of Pakistan (SBP) in its emergency meeting on Thursday decided to further cut the key policy rate by 200 basis points (bps) to 9 percent to minimize the Coronavirus shock on economic growth.

This is the third cut since last month.