Karachi, July 15, 2022 (PPI-OT): Resumption of IMF Program provides much needed relief

Pakistan equities closed the 3-day week on a positive note at 42,075, reporting an increase of 1.8% WoW. Volumes also witnessed a strong rebound with 178 million shares traded during the week, witnessing an increase of 97% on WoW basis. Among key outperformers during the week were OMC (+5.0% WoW), Engineering (+4.1% WoW) and Cement (+3.0% WoW) sectors. Investors celebrated the resumption of the much-awaited IMF program as Pakistan reached the staff level agreement for release of US$1.17 bn.

Moreover, the size of the program also increased by US$1bn to US$7bn, extending the program to Jun-2023, subject to approval from the Board. Along with this, international oil prices remained volatile, where Brent Crude touched a recent low of US$94.78 per barrel (Sep contract) before closing the week at above US$100 per barrel. In order to pass on the impact of decline in international oil prices and provide relief, Petrol and Diesel prices were also reduced in the country. All these positive developments overshadowed the 125 bps increase in the country’s Policy Rate last week.