Stocks up 1.4pc WoW; market upbeat on IMF deal

Stocks eked out weekly gains on strong financial results and an ease in political tensions in the country. The market to stay around any progress on the IMF bailout programme next week, traders said. The benchmark KSE-100 index closed at 41,581 points, gaining 573 points (up by 1.40 percent) week-on-week (WoW). Average volumes arrived at 208 million shares (up by 98 percent WoW) while the average value traded settled at $ 25 million (up by 91 percent WoW). “The government has fulfilled pre-requisites for resumption of the IMF programme, as well as received commitments from friendly countries such as Saudi Arabia and UAE,” said brokerage Arif Habib Ltd. “Further commitments and funds from other countries and financial institutions will bring the IMF programme on track, rejuvenating the overall sentiment of the market,” it added. The three-day week post-Eid commenced on a positive note amid optimism over upcoming quarterly financial results in major sectors during the week. Investor sentiment remained robust since the finance minister informed on Monday that all the International Monetary Fund conditions had been met and the government was arranging for another $3 billion from international creditors, which then would enable revival of the IMF programme soon. Moreover, the political temperature came down after all the political parties initiated talks to decide a date for elections. The State Bank of Pakistan reserves witnessed an increase of $30 million during the week. Meanwhile, the Pak rupee depreciated against USD by PKR 0.38 | 0.13 percent WoW, closing the week at PKR 283.8. Foreigners’ selling continued during the week, clocking in at $14.2 million compared to a net sell of $0.3million last week. Major selling was witnessed in all other sectors ($16.7 million) and food and personal care products ($0.4 million). On the local front, buying was reported by companies ($15.9 million) followed by individuals ($1.6 million). Sector-wise positive contributions came from commercial (184 points), fertiliser (141 points), miscellaneous (38 points), chemical (36 points), and pharmaceuticals (32 points). Scrip-wise positive contributors were UBL (167 points), DAWH (130 points), MARI (58 points), MEBL (38 points), and FFC (37 points). The sectors which contributed negatively were technology and communication (31 points), glass and ceramics (7points), and transport (4 points). Meanwhile, scrip-wise negative contributions came from HBL (60 points), SYS (39 points), PPL (30 points), OGDC (25 points), and ENGRO (18 points). Wasil Zaman at JS Research said market sentiments improved during the week as the finance minister assured that all prior conditions of the IMF including financial guarantees from Saudi Arabia and UAE had been met.

On the news front, COAS Gen Asim Munir embarked on a four-day visit to China to enhance military ties, whereas PM Shehbaz Sharif secured a trust vote in the National Assembly. Asian Development Bank in its report on Pakistan highlighted key challenges for the country, urging a focus on economic management, boosting competitiveness and private sector development as the way forward. As per the Pak-China Joint Chamber of Commerce and Industry, CPEC after completing its early harvesting phase has now entered its second phase, which will focus on industrial cooperation, trade, agriculture and socio-economic development. Nabeel Haroon at Topline Securities said an increase in the benchmark index could be attributed to upbeat earning announcements, which continued to garner investor interest.