On Monday (today), the benchmark index immediately increased following the start of trading, assisting shares at the Pakistan Stock Exchange (PSX) to begin the day in the black. The KSE-100 index has risen by 692.26 points, or 1.75 percent, as of 10:45 a.m. to reach 40,361.46 points.
Analysts attribute the rise in the stock market to the government’s initiatives to minimize circular debt in the gas sector.
A committee led by Ashfaq Tola, president of the Institute of Chartered Accountants of Pakistan, was established as part of these attempts to offer suggestions on how to proceed with debt settlement.
Since the market opened aggressively, there has been a demand in buying energy-related products.
According to Raza Jafri, head of equity at Intermarket Securities, this follows recent claims that the government is attempting to address the circular debt problem.
“There is also a perception that the selling is overdone,” he added in reference to last week’s stock market disaster, in which the benchmark index dropped more than 1,900 points in only three days.
Jafri claims that the impending Saudi Arabian inflows, which would boost the country’s foreign exchange reserves, which are now at an eight-year low, could have a positive effect on the market.
IMF has ordered the government to create a realistic strategy to reduce circular debt in the energy sector in order to effectively complete the ninth and tenth reviews, according to Salman Naqvi of Aba Ali Habib Securities.
“If the government manages to pay the significant receivables of [gas companies] through any means, it will greatly benefit PPL, OGDCL and PSO,” he commented, noting that the weighted average of these companies in the stock market was “high”.
At 10:35 a.m., PPL shares were up Rs. 4.31 or 7.5 percent, OGDCL shares were up Rs. 3.62 or 4.96 percent, and PSO shares were up Rs. 6.89 or 5.2 percent.
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