The International Monetary Fund’s (IMF) ninth review’s completion delays and escalating political unrest, according to analysts, are to blame for the Pakistan Stock Exchange’s (PSX) early-day Thursday decline of more than 600 points in share prices.
The benchmark KSE-100 index dropped 613.5 points, or 1.47 percent, to hit 41,124.12 points at 10:21 am.
According to local media reports, Head of Equity at Intermarket Securities Raza Jafri said that market sentiment was negative due to concerns that the distribution of the IMF tranche would be postponed until next year.
Jafri continued, “Valuations are unquestionably low, but there may still be pressure from redemptions today as tail-end flows shift toward fixed income.”
A $7 billion IMF program was added to Pakistan’s 2019 agreement, which originally called for $6 billion. Presently, the IMF and the government are negotiating remotely for the release of $1.18 billion since the ninth review of the program is still pending.
Pakistan and the IMF engaged in a round of communication on November 18 but were unable to agree on a timetable for formal negotiations on the past-due ninth review.
The negotiations, which had been set for the final week of October, were moved to November 3 and then continued to be delayed due to discrepancies in the two parties’ estimates.