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Tuesday April 23, 2024

Stocks surge 1.5 percent as IMF signals support for new govt

The IMF also praised the caretaker government for maintaining economic stability during the interim period

By Our Correspondent
February 24, 2024
Digital monitor showing the share prices at the Pakistan Stock Exchange (PSX) in Karachi. — INP/File
Digital monitor showing the share prices at the Pakistan Stock Exchange (PSX) in Karachi. — INP/File

Stocks rose for a third consecutive session on Friday, boosted by optimism over the IMF's willingness to work with the new government and the progress of political transition in the country, dealers said.

Pakistan Stock Exchange (PSX)’s benchmark KSE-100 index closed at 62,815.82 showing an increase of 901.47 points or 1.46 percent. The index traded in a range of 1,095.70 points showing an intraday high of 62,945.37 (+1,031.03) and a low of 61,849.67 (-64.67) points. Total value of trading was 196.698 million shares.

The market was buoyed by the IMF's statement on Thursday that it looked forward to working with the new government on policies to ensure macroeconomic stability and prosperity for all Pakistanis.

The IMF also praised the caretaker government for maintaining economic stability during the interim period. The developments on the formation of the government in federal and provinces also contributed to keep the momentum of the market upward.

“Stocks closed sharply higher after Punjab assembly sworn in easing political noise and IMF affirmation on working with new government on policies to ensure macroeconomic stability," said Ahsan Mehanti, analyst at Arif Habib Corp.

He said that reports of new government to seek at least $6 billion in new IMF loan program and negotiate extended fund facility to avert economic crises played catalytic role in bullish close.

Brokerage Topline Securities said KSE 100 Index, continuing its momentum, gained 901 points to close at 62,816 level and "this positivity in market can be attributed to start of process of formation of provincial governments where Punjab Assembly held its first session Friday and Sindh Assembly first session will take place Saturday where elected representatives of the province will take their oath".

Brokerage house said that investor confidence has increased as things are moving smoothly towards formation of government in the center and provinces. "News that Pakistan intends to seek at least $6 billion from IMF to help repay dollar debt due this year and statement from IMF that they intend to work with the new government in Pakistan to help macroeconomic stability; provided further stimulus to the market."

Investor participation increased further as average traded volume and value stood at 378 million shares (up by 17 percent on day-on-day basis) and Rs16 billion (up by 15 percent day-on-day basis) respectively. KOSM was today`s volume leader with 16 million shares, as it gained to close at its upper limit.

At the close of the trading, 65 companies closed up, 26 closed down, 2 were unchanged, while 7 remained untraded. The benchmark index was supported by Oil & Gas Exploration Companies with 318.22 points, Commercial Banks with 253.13 points, Fertilizer with 64.21 points, Power Generation & Distribution with 50.77 points, and Textile Composite with 45.61 points. The index was let down by Technology & Communication with 10.49 points, Inv. Banks/Inv. Cos./Securities Cos. with 4.23 points, Cable & Electrical Goods with 1.7 points, Transport with 1.23 points, and Real Estate Investment Trust with 0.68 points.

Companies adding points to the index were OGDC with 168.25 points, PPL with 98.35 points, MEBL with 89.92 points, FFC with 68.97 points, and MCB with 52.69 points. Meanwhile, companies that dragged the index lower were TRG with 13.44 points, SYS with 9.52 points, HINOON with 7.7 points, FFBL with 7.06 points and AVN with 4.39 points.