Led by a buying spree in oil and gas sector stocks, the Pakistan Stock Exchange (PSX) witnessed a bullish trend in the final hours of the trading session on Monday with the benchmark KSE-100 Index gaining over 1%.
The KSE-100 remained range-bound in the first half of the session. However, a strong buying spree helped it hit an intra-day high of 64,090.88 in the final few minutes.
At close, the benchmark index settled at 63,939.41, up by 657.19 points or 1.04%.
Heavy buying was witnessed in oil and gas exploration companies, OMCs, refineries and power & distribution companies, with OGDC, PPL, SNGP and SSGC standing out.
Experts said the buying spree comes amid reports that the government has shared its “dividend plug-in back scheme” with the International Monetary Fund (IMF), which is a positive for the oil and gas sector.
The development is expected to solve the circular debt problem engulfing the country’s energy sector, said experts.
media had earlier reported that the interim minister has prepared an innovative plan to reduce circular debt of energy sector, which has been shared with caretaker Finance Minister Dr Shamshad Akhtar.
According to the main features, the plan will be restricted to public sector companies only, budget neutral and zero leakage. “Total settlement of Rs1.268 trillion will be done.”
During the previous week, the bourse remained under severe selling pressure due to geopolitical tension between Pakistan and Iran. The benchmark KSE-100 index plunged by 1,355.41 points on a week-on-week basis and closed at 63,282.23.
Earlier, the IMF said timely adjustments in electricity tariff are critical to restore energy sector viability while maintaining a progressive structure to protect the most vulnerable households.
This was highlighted in the IMF document titled ‘First Review under Stand-By Arrangement (SBA), request for waiver on non-observance of a performance criterion, modification of performance criteria and for rephasing of access’ and reiterated the need for swift movement on broader reforms to reduce operational inefficiencies, improve performance, and reduce distortions that combine to continue to add pressure on Circular Debt flows.
Globally, most Asian markets rose Monday following a record finish on Wall Street, but hopes for an early US interest rate cut were dealt a fresh blow by Federal Reserve officials looking to rein in investor expectations.