Stocks rally on value-hunting amid strong bailout bets

Stocks on Tuesday rallied as investors went after valuations, betting on an International Monetary Fund (IMF) bailout approval today (Wednesday), amid emerging economic clarity and a strengthening rupee, dealers said.

Salman Ahmad, head of institutional sales at Aba Ali Habib said, “Beside oversold position of the market, index improved sharply as all the uncertainties on economic front now appeared to have been unfolded, which gave investors’ confidence a sharp boost.

The IMF board approval is around the corner and with their stamp over the country’s economic reforms, fresh inflows have been expected from other multilateral donor agencies, Ahmad added.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.91 percent or 310.78 points to close at 34,307.11 points, whereas KSE-30 went up 1.22 percent or by 195.42 points to end at 16,169.31 points.

Of 307 active scrips, 206 moved up, 77 retreated, and 24 remained unchanged. Ready market volumes stood at 91.162 million shares, as compared to 48.046 million shares in the previous session.

Muhammad Faizan Munshey, head of foreign institutions sales at Next Capital said “the market closed higher as the government believes that it has taken all advance actions agreed with the IMF and that the bailout package would be approved in the fund’s executive board meeting scheduled for Wednesday”.

The arrival of $500 million dollars from the Qatar and Saudi oil facility worth of $275 million dollars commenced from this month further helped impaired the confidence of the investors, Munshey said.

Moreover, Prime Minister Imran Khan is likely to visit USA later this month and that trip also might help bridge the trust gulf with the super power. Topline Securities in a report said equities managed to cross 34,000 points level as investors drew strength from an expected approval of bailout package worth $6 billion from the executive board of IMF scheduled on July 03, 2019, which is likely to provide much-needed ‘balance of payment’ support to the economy.

Following a hike in urea per bag prices, fertiliser scrips continued to entice investors as all major scrips EFERT, FATIMA, FFBL, and FFC gained value in the range of 1-4 percent, the brokerage said.

World Bank is committing $465 million through two projects to support higher education in Pakistan and expand sustainable electricity trade between Central Asia and South Asia. Positive sentiments were also fuelled by the appreciation of rupee against the US dollar. The dollar at the interbank traded 2.05 rupees lower at 158.

The highest gainers were Sapphire Fibre, up Rs43.10 to close at Rs905.25/share, and Murree Brewery, up Rs16.83 to finish at Rs760.00/share. Companies that booked highest losses were Nestle Pakistan, down Rs249 to close at Rs6750/share, and Imrooz Modaraba, down Rs7.39 to close at Rs140.43/share.

K-Electric Limited recorded the highest volumes with a turnover of 13.561 million shares. The scrip gained Rs0.04 to close at Rs4.38/share. The lowest volumes were witnessed in Bank Al-Habib, recording a turnover of 1.921 million shares, whereas the bank’s scrip gained Rs0.54 to end at Rs78.89/share.