Monday January 30, 2023

Stocks recover amid hopes of IMF loan revival

By Our Correspondent
January 25, 2023

Stocks closed higher on Tuesday as investors anticipated the revival of the International Monetary Fund (IMF) programme after the central bank increased the interest rate, traders said.

Pakistan Stock Exchange (PSX) benchmark KSE 100-share Index went up 1.59 percent or by 612.06 points to close at 39,055.65 points against 38,443.59 points recorded in the last session. Intraday high was at 39,091.25 points, while the lowest level of the day was recorded at 38,443.59 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed bullish in the earnings season rally at PSX led by scrips across the board as investors speculate likely approval of IMF deal on SBP decision to hike key policy rate amid surging inflation.”

Easing political noise and possible resolution to Rs1.6 trillion gas circular debt crises in the near-term played a catalytic role in the bullish close, he added.

KSE-30 index also increased by 222.07 points or 1.56 percent to close at 14,488.48 points compared with 14,266.41 points recorded in the last session.

Volumes increased by 98 million shares to 179.760 million shares from 81.287 million shares. Value increased to Rs6.368 billion from Rs2.809 billion. Market capital expanded to Rs6.203 trillion from Rs6.135 trillion. Out of 326 companies active in the session, 225 closed in green, 74 in red, while 27 remained unchanged.

An analyst at Topline Securities said the positivity in the market could be attributed to the SBP monetary policy announcement, where the central bank increased the policy rate by 100bps to 17 percent. The market was expecting a higher percentage increase on the uptick in secondary market bond yields and rising external account concerns.

Engro, TRG, Pakistan Petroleum Limited (PPL), Oil and Gas Development Company, and HBL were the major gainers in the trading session, as they cumulatively added 283 points to the index.

The highest increase was recorded in the shares of Pak Services, up Rs146.67 to close at Rs2,130/share, followed by Reliance Cotton, up Rs48.75 to close at Rs698.75/share. A significant decline was noted in the shares of Sapphire Tex, down Rs82 to end at Rs1,018/share, followed by Wah-Noble, down Rs11.45 to end at Rs147.50/share.

Brokerage Arif Habib Ltd said, “Today, the bulls triumphed at the PSX. Investors celebrated after the much-needed clarity on the monetary policy statement, as the index opened in the green and proceeded to trade positively throughout the trading session.”

It said that anticipation of favourable outcomes from the IMF programme revival at a staff-level meeting soon helped the index reach an intraday high of 648.11 points as investors remained active throughout the day. Volumes improved drastically across the board from the previous close.

Sectors contributing to the performance included E&P’s (+98.3 points), fertiliser (+88.7 points), cement (+81.7 points), miscellaneous (+77.0 points), and commercial banks (+69.9 points).

PPL remained the volume leader with 13.159 million shares. Its scrip increased by Rs3.60 to close at Rs78.15/share. It was followed by Maple Leaf with 12.487 million shares that closed higher by 95 paisas to Rs20.50/share.

Other stocks that recorded significant turnover included WorldCall Telecom, Al Shaheer (R), OGDC, TRG Pak Ltd, Cnergyico, Fauji Cement, TPL Properties and Sui Northern Gas Pipelines Limited.

Shares’ turnover in the future contracts increased to 172.051 million shares from 111.352 million shares.