Stocks cheer finance minister’s IMF deal optimism

Stocks perked up on Monday on finance minister's assurance of a staff-level agreement with IMF next month, setting off a wave of optimism among economy-sensitive investors, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Shares Index gained 178.69 points or 0.42 percent to close at 43,040.14 points. “The market opened on a positive note as finance minister’s statement an IMF staff-level agreement is expected in June 2022 led the market to make an intraday high of 396 points,” said Mohammad Arbash at Topline Securities.

Finance Minister Miftah Ismail on Saturday said the government would reach the staff-level agreement with the IMF within June. Hopes of the IMF programme's revival rose on Thursday after the federal government raised the price of petroleum products by Rs30 as the fund did not resume the programme due to the subsidies provided on oil and power.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, “Stocks closed bullish as investors weigh FM hints over the expected resumption of IMF program in Jun’22 and strong rupee recovery.” Pre-budget speculations on expected Rs700 billion PSDP in the federal budget due next month, record revenue collection target of Rs7.255 trillion in FY23, and surging global equities led to the bullish close, he said.

KSE-30 Shares Index also closed higher by 107.07 points or 0.66 percent to 16,383.19 points. Traded shares, however, plunged by 350 million shares to 187.471 million shares from 527.672 million shares. The trading value decreased to Rs6.118 billion from Rs13.974 billion. Turnover in the future contracts dropped to 65.591 million shares from 268.915 million shares.

Market capital expanded to Rs7.143 trillion from Rs7.123 trillion. Out of 335 companies active in the session, 138 closed in the green, 179 in the red, while 18 remained unchanged. JS Research said any news related to budgetary measures was expected to directly affect the sentiments. “We advise a sell-on-strength strategy,” the brokerage said. Colgate Palmolive stole the show after surging by Rs42 to Rs2,152/share, followed by Sapphire Fiber, which jumped by Rs35.14 to Rs1,115/share.

On the other hand, Rafhan Maize bled the most in the day, losing Rs190 to settle down at Rs9,800/share, followed by Mehmood Textile, which fell by Rs70 to Rs875 per share. Brokerage Arif Habib Ltd said the market remained green throughout the day watered hopes of the IMF loan revival, which also helped the rupee get stronger against the US Dollar.

“Mainboard activity remained healthy in energy and OGDC remained in the limelight as expectation of nod from ECC to convert OGDC receivables into PIBs (Pakistan Investment Bonds,” it reported.

Supporting sectors included oil and gas exploration and production (+79.4 points), oil marketing companies (+24.8 points), technology (+23.2 points), autos (+20.1 points), and banks (+13.5 points).

TPL Properties was the highest traded stock. It recorded a trade of 18.538 million shares and closed higher by 56 paisas to Rs19.28/share. The second on volume chart was Pak Refinery with 17.238 million shares. It rose by 3 paisas to Rs17.82/share.

High trades were seen in Cnergyico PK, Ghani Global Holdings, Oil & Gas Development Company, WorldCall Telecom, Pakistan Petroleum, Pak Elektron, Telecard Limited, and Sui North Gas.