Stocks jump on IMF loan optimism

Stocks closed higher on Tuesday amid hopes that the International Monetary Fund programme would resume as talks continued between the government of Pakistan and the IMF team, traders said.

Pakistan Stock Exchange (PSX) benchmark KSE 100-share Index went up 2.01 percent or 801.79 points to close at 40,673.06 points against 39,871.27 points recorded in the last session.

Intraday high was 40,717.33 points, while the lowest level of the day was recorded at 39,871.27 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks showed sharp recovery in the earnings season on institutional interest in scrips across board after IMF review mission, led by IMF mission chief, expressed confidence that the government will meet the IMF requirements for the completion of the 9th review, and hoped that Pakistan would continue towards its progress on the reforms.”

Rupee investor speculations over likely help from the US to ease IMF terms, and receipts for financial support played a catalytic role in the bullish activity, he added

KSE-30 index also increased by 292.71 points or 1.96 percent to close at 15,190.43 points compared with 14,897.72 points recorded in the last session.

Volumes increased by 13 million shares to 153.324 million shares from 140.465 million shares, whereas value increased to Rs7.441 billion from Rs5.458 billion. Market capital expanded to Rs6.394 trillion from Rs6.293 trillion.

Out of 328 companies active in the session, 217 closed in green, 89 in red and 22 remained unchanged.

Analyst Nabeel Haroon at Topline Securities said a positive session was observed at the exchange as the index. “This positivity in the market can be attributed to recovery following pressure in the market yesterday where the index closed -1.5 percent and resumption in talks with IMF – following IMF team arrival in Pakistan,” he added.

The major contributions to the index came from Engro, Pakistan Service Limited (PSL), Hubco, Engro Fertilizers, and Lucky Cement, as they cumulatively contributed 378 points to the index.

The highest increase was recorded in the shares of PSL, up Rs155 to close at Rs2,265/share, followed by Colgate Palm, up Rs139.91 to close at Rs2,029.91/share. A significant decline was noted in the shares of Rafhan Maize, down Rs674 to end at Rs8,325/share, followed by Bhanero Tex, down Rs26.75 to end at Rs1,000.01/share.

Brokerage Arif Habib Ltd said the market opened in the green and continued to trade with optimistic sentiments throughout the trading session, reaching an intraday high of 826.83 points as a result of ongoing negotiations in the capital city between the government and the IMF mission.

“Investors’ involvement remained adequate due to the potential positive outcomes of the IMF talks,” it reported. Decent volumes were observed across the board.

Sectors contributing to the performance included fertiliser (+166.0 points), commercial banks (+122.4 points), E&Ps (+106.0 points), cement (+82.9 points), and miscellaneous (+79.2 points).

WorldCall Telecom remained the volume leader with 13.426 million shares with a flat rate of Rs1.14/share. It was followed by Pak Petroleum with 10.194 million shares that closed higher by Rs1.27 to Rs10.194/share.

Other stocks that recorded significant turnover included Pak Refinery, Maple Leaf, Fauji Cement, Oil and Gas Development Company, P.I.A.C.(A), Hubco, Sui Northern Gas Pipelines Limited and TRG Pak Ltd.

Shares’ turnover in the future contracts decreased to 44 million shares from 51.121 million shares.