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The Pakistan Stock Exchange (PSX) continued its positive momentum on Wednesday, rising more than 550 points in early trade.
The benchmark KSE-100 index rose 554.29 points, or 1.32%, to 42,650.53 as of 10:18 a.m., according to the PSX website.
Raza Jafri, head of research at Intermarket Securities, attributed the rally to expected investment in the United Arab Emirates and the country’s approach to reviving the International Monetary Fund (IMF) program.
Jaffrey said the economy is stabilizing as Pakistan moves closer to reviving the IMF plan. “This is turning attention to corporate profits and the cheap valuations on offer.
“[The] Expected investments from the UAE have also attracted investor interest, especially in energy stocks,” Jafri said.
Last week, the Emirates National News Agency WAM Have report Saudi Arabia intends to invest $1 billion in Pakistani companies across industries.
The agency added that the UAE is keen to continue working with Pakistan “in various fields including gas, energy infrastructure, renewable energy, healthcare”.
Meanwhile, Salman Naqvi, head of research at Aba Ali Habib Securities, said the market had reacted positively to a number of factors, including the IMF’s ensureUAE investments and the depreciation of the dollar.
“The market has been strengthening over the past few sessions as the IMF has assured Pakistan that some of the payments will be received and import bills have been largely reduced due to lower trade and current account deficits.
“Besides this, yields on Pakistani investment bonds have strengthened. This clearly shows that Pakistan has moved out of the default category,” he said.
The U.S. dollar has fallen 7 percent in the interbank market since July 29, Naqvi noted, and the U.S. dollar could depreciate further once it receives installments from the International Monetary Fund and an inflow of $4 billion from friendly countries.
“Its impact will have a very positive impact on our economy,” he added.
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