In Focus Economy & Strategy: IMF and Geopolitical Developments – Equities Up, Up and Away!
IMF approves third tranche in its review meeting on Saturday. Additional financing of USD3.24bn has been approved, which brings the total package to USD11.33bn
About USD1.2bn will be immediately disbursed to Pakistan, out of which USD431mn can be used for priority fiscal spending
IMF support should help strenghten the PKR in the short term and enable government to avoid significant cuts to PSDP spending
Remarks on inflationary pressures and the use of monetary policy confirm our view that the SBP will remain cautious with regards to discount rate cuts throughout FY10, maintain target of 10.5%
Recent progress on War on Terror and IMF review should bode well for our earlier stated Jun10 KSE100 target of 9,500 with our top picks being OGDC, PSO, HUBC, POL and MCB Technical Outlook - Buy into New Highs
In recent weeks market has shown gradual and consolidative bullish move after bottoming out at around 6,800
Analysis of weekly & daily , suggest that last Friday’s move was a genuine one, however gains over and above the aforementioned resistance level is expected to lure in market participants who are willing to bid higher
We reiterate cautious stance and recommend not to chase price action unless trading at a new high with increased interest. On the contrary, if holding long positions we advise investors to stay long with stop set at close below the important support level of 7,679