The Pakistan Stock Exchange (PSX) surged to a new all-time high, as the benchmark KSE-100 index gained 1,505.56 points on Friday. At close, the benchmark index settled at 66,223.63 points, up 2.33 percent over the previous day.
According to Arif Habib Limited (AHL), the KSE-100 has increased by 4,532 points or 7.35 percent on a week-on-week basis, the highest-ever weekly increase in absolute terms. The previous highest weekly increase was recorded on April 3, 2020, over 3.5 years ago.
The ongoing momentum comes on the back of improving economic indicators after Pakistan and International Monetary Fund (IMF) staff authorities reached a staff-level agreement on the first review under Pakistan’s Stand-By Arrangement (SBA) last month, which will unlock a loan tranche of $700 million for the country.
The IMF’s Executive Board is set to meet on January 11 to consider final approval for the loan tranche. Pakistan expects that the release of the loan will also unlock financing from other multilateral institutions.
Commenting on the development, former Finance Minister Miftah Ismail said in a post on X that the stock exchange index is considered a leading economic indicator, meaning it generally goes up a few months before a pickup in economic activity and goes down a few months before an economic downturn.
This would then suggest that we have seen the bottom of our economic cycle and hopefully the economic situation will improve, the former finance minister added.