In sharp U-turn, stocks turn bullish

KARACHI: Pakistan Stock Exchange (PSX) on Thursday made a sharp U-turn as the KSE-100 index soared over 1,000 points, crossing the 65,000 mark in a giant leap that came in the backdrop of optimism about the last review of the International Monetary Fund’s $3 billion standby arrangement (SBA) and a reduction in bond yields. The bourse surged as soon as trading began and the uptrend continued steadily almost throughout the day, following the commencement of government’s discussion with the IMF. The finance ministry’s assurance of the country being in a good shape to complete the SBA and negotiate a new larger and longer loan package lifted investors’ spirit. Furthermore, the fall in Pakistan Investment Bond (PIB) yields in an auction held a day ago acted as a positive trigger and bolstered investors’ interest. In the auction, the government raised Rs56 billion against the target of Rs190 billion, with cut-off yields decreasing by 2 to 15 basis points, indicating a policy rate cut by the State Bank in March or April. It boosted the positive sentiment and lifted the index to the intra-day high of 65,205.81 towards the close of trading.