Stocks rally for third day on IMF loan optimism

Stocks on Thursday extended gains as a complete reversal of subsidies on fuel prices fired up optimism that the IMF's elusive loan tranche of nearly $1 billion would finally make it to Pakistan, traders said.

Benchmark KSE-100 Shares Index rose 291.37 points or 0.70 percent to 41,730.16 points after touching a high of 41,764.19 and a low of 41,323.58 points during the day trade.

Brokerage Arif Habib Ltd said stocks barreled ahead after the government's tough measure of raising fuel prices fattened the chances of a staff-level agreement with the IMF.

“The index stayed in the green zone throughout the day. Activity remained healthy across the board as the cement sector was in the limelight due to price increase in the North region,” it reported.

Sectors contributing to the performance included E&P (+63.7 points), power (+55.8 points), cement (+53.7 points), fertiliser (+49.3 points), and OMCs (+35.4 points).

KSE-30 Shares Index also increased by 122.89 points or 0.78 percent to 15,937.89 points.

Traded shares increased by 21 million shares to 162.179 million shares from 141.705 million shares.

The trading value rose to Rs4.780 billion from Rs4.763 billion.

Turnover in the future contracts decreased to 36.082 million shares from 43.818 million.

Market capital was almost flat at Rs6.938 trillion compared to Rs6.897 trillion. Out of 336 companies active in the session, 173 closed in the green, 134 in the red, while 29 remained unchanged.

Topline Securities said after a sideways opening, the market shot up due to optics like increase in petrol and diesel prices to record Rs234/litre and Rs263/litre, coupled with an amendment in tax relief provided to salaried class in order to meet the IMF conditions,” the brokerage said.

The highest increase was recorded in share prices of Rafhan Maize, which rose Rs695 to Rs10,495/share, followed by Nestle Pakistan, up Rs104.90 to close at Rs5,880/share.

A major decline was noted in shares of Colgate Palm, which fell by Rs47 to Rs2,153 per share, followed by Sapphire Textile, which decreased by Rs43.61 to Rs1,106.38/share.

JS Research said the index maintained upward momentum but participation remained dull throughout the trading session.

“Going forward, we recommend investors to wait for clarity on the economic front and avail any downside as a buying opportunity,” the JS analysts said.

Ahsan Mehanti at Arif Habib Corp said stocks showed recovery as investors weighed the falling treasury yields, gains on China agreement to rollover loans, additional assistance and likely FATF decisions to whitelist Pakistan.

Reports of $197.5 million debt suspension and likely IMF programme resumption next week led to the bullish close, Mehanti said.

However, he said industrials were battered on rising power tariffs and the falling rupee.

WorldCall Telecom led the volume chart with 21.553 million shares. The stock closed lower by 5 paisas to Rs1.42/share. It was followed by Oilboy Energy (R) with 11.396 million shares. The company increased by Re1.0 to Rs2.01/share.

Other stocks that recorded significant turnover included Maple Leaf, Pak Refinery, Cnergyico PK, Dewan Cement, Hum Network, Oil & Gas Development Company, K-Electric Ltd, and DG Khan Cement.