Bloomberg
01/27/2023

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16:43:19 [BN] Bloomberg NewsPakistan Stocks Set for Best Week Since 2020 on IMF Optimism
Authorities also plan mini budget to raise taxes: Alpha BetaRupee hit another record low Friday while dollar bonds rose
By Karl Lester M. Yap and Ronojoy Mazumdar(Bloomberg) -- Pakistan’s stocks are set for their best week in almost three years amid optimism that the nation is
closing in on aid from the International Monetary Fund. Dollar bonds rose Friday while the rupee slid to anotherrecord low.
The benchmark KSE-100 Index has rallied 6% in the past five days to head for its biggest weekly gain since April
2020. But even with the advance, the index is still more than 12% below the peak set last April.
Investors have dialed back bearish bets on Pakistan after authorities took steps aimed at persuading the IMF to
resume a $6.5 billion bailout. Apart from unshackling the dollar-rupee rate, the government is also planning a minibudget to raise taxes, said Khurram Schehzad, chief executive officer of Alpha Beta Core Solutions Pvt., a financialconsultancy in Karachi.
“The key positive trigger is the government’s willingness to meet IMF conditions,” said Ruchir Desai, an equities fundmanager at Asia Frontier Capital Ltd. in Hong Kong. “That will lead to IMF money coming through and that will
unlock more funding from other friendly countries. That’s what the market is looking at.”This report may not be modified or altered in any way. The BLOOMBERG PROFESSIONAL service and BLOOMBERG Data are owned and distributed locally by Bloomberg Finance LP ("BFLP") and its
subsidiaries in all jurisdictions other than Argentina, Bermuda, China, India, Japan and Korea (the ("BFLP Countries"). BFLP is a wholly-owned subsidiary of Bloomberg LP ("BLP"). BLP provides BFLP
with all the global marketing and operational support and service for the Services and distributes the Services either directly or through a non-BFLP subsidiary in the BLP Countries. BFLP, BLP and theiraffiliates do not provide investment advice, and nothing herein shall constitute an offer of financial instruments by BFLP, BLP or their affiliates.
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The optimism was also reflected in the credit market, with Pakistan’s dollar bonds due 2031 indicated 0.5 cents
higher at 42.2 cents on the dollar in a second day of gains. In contrast, the rupee tumbled to an all-time low of
259.71 to the greenback, according to data compiled by Bloomberg.
Pakistan’s currency may weaken past 300 in the near term after authorities removed a cap on the dollar-rupee
exchange rate, according to Tellimer Ltd., a firm that specializes in emerging-market research. Yousuf Saeed, headof research at Darson Securities Ltd., says it could drop to 275 to 280.
A bailout from the IMF will help keep the economy afloat as Prime Minister Shehbaz Sharif battles power outages, ashrinking supply of dollars and political tensions that threaten to sink the nation deeper into a crisis. An IMF team is
set to visit Pakistan from Jan. 31 for talks aimed at disbursing a loan to the nation.
“Letting the rupee float shows they are pushed to meet IMF demands and that’s giving market sentiment a boost,”
said Ankur Shukla, an economist at Bloomberg Economics in Mumbai. “IMF loans are very crucial right now.
Without it, default is inevitable.”(Updates prices throughout and adds economist comment in last paragraph )--With assistance from Faseeh Mangi.
To contact the reporters on this story:
Karl Lester M. Yap in Manila at kyap5@bloomberg.net;
Ronojoy Mazumdar in Mumbai at rmazumdar7@bloomberg.net
To contact the editors responsible for this story:
Tian Chen at tchen259@bloomberg.net
Liau Y-Sing, Jiyeun Lee

This report may not be modified or altered in any way. The BLOOMBERG PROFESSIONAL service and BLOOMBERG Data are owned and distributed locally by Bloomberg Finance LP ("BFLP") and its
subsidiaries in all jurisdictions other than Argentina, Bermuda, China, India, Japan and Korea (the ("BFLP Countries"). BFLP is a wholly-owned subsidiary of Bloomberg LP ("BLP"). BLP provides BFLP
with all the global marketing and operational support and service for the Services and distributes the Services either directly or through a non-BFLP subsidiary in the BLP Countries. BFLP, BLP and theiraffiliates do not provide investment advice, and nothing herein shall constitute an offer of financial instruments by BFLP, BLP or their affiliates.
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