Stocks end flat as IMF loan boost fades on election woes

Stocks closed little changed on Friday, as investors took profits after an initial rally on the approval of a $700 million loan tranche from the International Monetary Fund, dealers said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 20.07 points or 0.03 percent to 64,637.64 points. The KSE-30 index also inched up by 51.33 points or 0.24 percent to close at 21,630.85 points.

The IMF’s executive board completed the first review of Pakistan’s economic performance under a $3 billion loan program on Thursday, paving the way for the release of the second tranche of funds. The IMF praised Pakistan’s progress in stabilizing its economy, reducing its fiscal and current account deficits, and strengthening its foreign exchange reserves.

However, the market euphoria was short-lived, as political uncertainty weighed on sentiment. A resolution submitted in the Senate on Friday called for a delay in the general elections scheduled for February 8, citing security issues. Dealers said the IMF loan approval was a positive development, but the political noise overshadowed it.

The market is nervous about the possibility of a delayed election, which could derail the economic recovery, they added. Analyst Ahsan Mehanti at Arif Habib Corp, said stocks closed slightly higher after $700 million tranche approved by the IMF board on completion of the first review of Pakistan economic reforms program.

"However, mid-session pressure remained amid uncertainty over the outcome of the senate resolution to postpone general elections." Traded shares increased by 57 million shares to 643.307 million shares from 586.548 million shares. The trading value increased to Rs20.021 billion from Rs17.024 billion. Market capital expanded to Rs9.453 trillion against Rs9.447 trillion. Out of 365 companies active in the session, 137 closed in green, 216 in red and 12 remained unchanged.

Analyst Nabeel Haroon at Topline Securities said the benchmark index opened on a positive note. "Investors, however, came in to book profit during the closing hours of the trade as they feared news flow regarding upcoming the election may keep the activity in the market volatile."

The highest increase was recorded in Unilever Pakistan Foods Limited, which rose by Rs299 to Rs22,399 per share, followed by Bhanero Textile Mills Limited, which increased by Rs70 to Rs1,020 per share. A significant decline was noted in Pak Suzuki Motor Company Limited, which fell by Rs63.80 to Rs834.77 per share, followed by Sapphire Fibres Limited, which closed lower by Rs49.90 to Rs1,700 per share.

Brokerage Arif Habib said the benchmark index remained flat week-over-week. The session closed with an advance/decline ratio of 39:53, prominently featuring MARI (+2.88 percent) and EFERT (+1.47 percent) as the primary contributors to index gains. Conversely, HUBC (-0.93 percent) and TRG PA (-1.79 percent) emerged as the most substantial drags on the index during the Friday session.

"Notably, the IMF approved Pakistan's $700 million loan tranche, potentially injecting a positive impetus into market sentiment and paving the way for robust gains in the upcoming week," the brokerage said.

K-Electric Ltd. remained the volume leader with 142.506 million shares which closed higher by 2 paisas to Rs6.03 per share. Pak Int. Bulk followed it with 77.950 million shares, which closed higher by 42 paisas to Rs7.57 per share.

Other significant turnover stocks included WorldCall Telecom, P.I.A.C. (A), Pak Petroleum, P.T.C.L., JS Bank Ltd, Hascol Petrol, Cnergyico PK and Treet Corp. A total of 312 companies recorded future shares, of which 112 increased, 192 decreased and 8 remained unchanged.