Still attractive stock valuations, expectations of more foreign inflows, and starting talks with the International Monetary Fund (IMF) on a new loan program added to the bullish sentiment.
The market has surged 80% over the past year, and it is up 16.1% year-to-date after an IMF loan program helped the government avert a debt default last summer.
On Tuesday, the MSCI index added a Pakistani bank, National Bank of Pakistan, to the MSCI frontier market index. Its shares rose 1.6pc on Wednesday, outperforming the benchmark index.
Pakistan last month completed a short-term, $3 billion IMF program, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term program.
An IMF mission is in Pakistan to discuss the financial year 2025 budget, policies, and reforms under a potential new program.
Wall Street bank Citi expects Pakistan to reach a four-year agreement with the IMF worth up to $8 billion by end-July and recommends going long on the country’s 2027 international bond.
