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Stocks swell as payment to IPPs cheered

Our Correspondent
Wednesday, Nov 17, 2021

Stocks on Tuesday surged as approval of second installment worth Rs135 billion to private producers spurred buying in cement and energy shares, amid renewed IMF loan bets, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index gained 806.65 points or 1.76 percent to hit 46,542.91 points, testing a high and a low of 46,628.70 and 45,736.26 points in the day respectively.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, stocks showed sharp recovery led by scrips across the board on robust data on textile exports, surging 26.6 percent in Jul-October FY2022 and remittances over $2.5 billion in October amid rupee recovery.

Rising global equities and global crude oil prices and speculations over resumption of the International Monetary Fund (IMF) programme led to a bullish close, Mehanti said.

KSE-30 Shares Index also jumped 352.22 points or 1.98 percent to 18,098.42 points.

Traded shares increased 71 million to 243.19 million from 172.85 million shares, while traded value rose to Rs10.43 billion from Rs5.13 billion.

Market capital improved to Rs7.924 trillion from Rs7.807 trillion.

Out of 351 companies active in the session, 239 rose, 89 fell, while 23 ended unchanged.

Topline Securities in a post-market note attributed the rally to renewed optimism over the IMF programme amid a joint session of the parliament scheduled for tomorrow.

Rupee also gained against the greenback amid expectations of receipt of Saudi loan, the brokerage said.

Power sector also came under the limelight after the ECC approved Rs135 billion payments to 35 IPPs (Independent Power Producers), it said, adding, consequently, KAPCO closed at its upper circuit, while HUBC closed the day at 75.30, up 3.24 percent.

Wyeth Pakistan Ltd was the top gainer of the day, up Rs120.05 to close at Rs1,720.72/share, followed by Sapphire Fiber that jumped Rs55.50 to Rs795.50/share.

Unilever Foods turned out to be the worst performer of the day, falling Rs49.50 to Rs18,900/share, followed by Philip Morris Pakistan that lost Rs33.99 to close at Rs752.01/share.

Brokerage Arif Habib Limited said bullish momentum was witnessed just after the opening bell, driven by power sector as ECC (Economic Coordination Committee) of the Cabinet approved Rs134.783 billion for payment to IPPs for second instatement (60 percent) as per payment mechanism.

Appreciation of rupee against dollar and Prime Minister’s decision not to increase the prices of petroleum products till November 30th also gave investor confidence to the market, the brokerage added.

The biggest support to the index came from cement and exploration and production stocks.

In the last trading hour, technology sector went north as TRG hit upper circuit due to rumor of buy-back of shares.

On the institutional front, buying activity was witnessed across the board from the mutual funds.

Ghani Global Holdings was the volume leader with 16.61 million shares, followed by TPL Properties that recorded a trade of 15.24 million shares.

Waves Singer, Telecard Limited, Service Fabrics, TRG Pakistan Ltd, Maple Leaf, Unity Foods Ltd, Merit Pack (R), and Hascol Petrol also registered notable volumes.

Turnover in the future contracts increased to 77.99 million shares from 47.37 million shares on Monday.