Stocks rebound on bottom-fishing

Stocks recovered on Wednesday amid emerging political clarity and renewed IMF deal bets that spurred a bottom-fishing spree, traders said.

KSE-100 Share Index, the benchmark of the country’s capital market, gained 300.82 points or 0.70 percent to 43,026.88 points after swinging between a high of 43,161.22 and a low of 42,508.30 points at Pakistan Stock Exchange (PSX).

Muhammad Waqar Iqbal at JS Research said the market participants were betting that Pakistan would manage to strike a deal with the IMF in Doha talks.

“Any positive progress on the IMF front is expected to push the index towards 44,000,” Iqbal said.

“Market strategy is suggested to take any dips as an opportunity to buy, where value hunting is advisable on oversold stocks. Cement, fertilizers and banks look attractive at current levels,” he advised.

Arif Habib Corp’s Ahsan Mehanti said stocks recovered sharply higher as investors weighed improving Pakistan-US relations after Foreign Minister’s visit to the US amid easing political noise and likely release of $1 billion IMF tranche following ongoing review talks for Extended Funding Facility programme.

Sectors contributing to the performance included cement (+57.6 points), technology (+55.4 points), fertilizer (+38 points) and power (+32.6 points).

ADB’s likely approval of up to $2 billion additional support loan till December 2022 and reports of GDP growth projections near 6 percent in FY23 contributed to a bullish close, he said.

The KSE-30 index also closed higher by 114 points or 0.70 percent to 16,360.38 points.

Trade volume increased 81 million to 278.803 million from 197.916 million shares, while value rose to Rs6.911 billion from Rs6.177 billion.

Turnover in the future contracts increased to 81.854 million from 60.434 million shares.

Market capital expanded to Rs7.128 trillion from Rs7.085 trillion. Out of 345 companies active in the session, 245 advanced, 83 retreated, while 17 held status quo.

Muhammad Arbash at Topline Securities said equities closed on a positive note after some clarification over political uncertainty as the government allies want the government to stay in power till next year and were ready to take tough decisions to shore up economy that affected the sentiment.

Nestle Pakistan posted the best gains of the day as it surged Rs89 to Rs5,790 per share, followed by Gatron Industries that climbed Rs28.76 to Rs448.75 per share.

Sapphire Fiber, the worst loser of the day, slumped Rs76.99 to Rs952.01 per share, followed by Sapphire Textile, down Rs75.70 to end at Rs934.50 per share.

Arif Habib Ltd in a note said easing political uncertainty helped investors to grab deals in value stocks.

The index stayed in the green zone during the day, whereas the main board activity remained dull due to the continuous rising of the US dollar against the rupee and lack of clarity regarding fiscal adjustment and resumption of the IMF programme, the brokerage said.

WorldCall Telecom topped the volume chart with 27.075 million shares, followed by Cnergyico PK with 24.142 million shares.

Other stocks that recorded significant turnover included Telecard Limited, Ghani Global Holding, Pak Elektron, G3 Technologyies, TPL Properties, PTCL, Unity Foods Ltd, and Pakistan Refinery.