Stocks close week in green amid external funding worries

Although the stock market ended the outgoing week with gains due to hopes of an interest rate cut, uncertainty on the external financing front turned investors cautious about the economic outlook. AKD Securities Ltd said the market remained rangebound during the outgoing week as investors waited for key events, including the International Monetary Fund (IMF) executive board’s approval and the rebalancing of the FTSE, with market movement influenced mainly by corporate results. The government is exploring every possible option to bridge the external financing gap, including approaching commercial banks in the Middle East. Furthermore, outflows related to FTSE rebalancing began as changes would take effect from Sept 23. Moreover, after almost three years, inflation eased to a single digit, clocking in at 9.6pc for August. Consequently, the real positive interest rate stood at nearly 10pc, and a differential between policy rates and 3-month secondary yield at 1.74pc, leading the market to expect a rate cut in the upcoming State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) meeting.