Stocks surge on Miftah’s IMF deal optimism

Stocks staged a massive recovery on Tuesday drawing strength from the finance minister’s hint that the IMF loan programme is almost in Pakistan’s pocket, which set off a value-buying binge, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index increased by 748.97 points or 1.79 percent to 42,525.95 points against 41,776.98 points recorded in the last session. The highest index of the day remained at 42,569.33 points while the lowest level of the day was recorded at 41,745.27 points.

“Stocks fed on rumors that the government has secured IMF deal, which is likely to be announced in a couple of days as a result the index initially opened on a positive note but profit-taking drove it down to an intraday low of 41,745 points,” Topline Securities said in its daily market review.

“Later, reports that the IMF deal would be concluded tonight spurred value hunting across the board.”

Technology, cement, E&P, and fertiliser sector stocks contributed positively to the index and SYS, TRG, LUCK, MARI, and FFC added 220 points, cumulatively, the brokerage said adding that on the flip side, UBL, MUREB and IGIHL together lost 20 points.

Around 300 million shares traded on Tuesday, while total value clocked in at Rs9.5 billion. TPLP was the volume leader of the day with a trade of 23.7 million shares.

Faisal Shaji, strategist at Standard Capital, said the positive vibes about possible inflows from the IMF propelled the market.

He said investors remained wary of the continuous spike in dollar against rupee in the interbank, but later gained confidence on rumors that fresh inflows are in the pipeline.

“We expect exporters to bring their dollars back once inflows from friendly states reach Pakistan, while the IMF flows are likely on the way,” Shaji said.

Arif Habib Ltd said bulls triumphed in the trading session at PSX today.

“A very strong likelihood of the resumption of the IMF programme bolstered the sentiment amid healthy volumes,” it said.

KSE-30 Shares Index also jumped 301.49 points or 1.89 percent to 16,255.80 points, compared with 15,954.31 points recorded in the last session.

JS Research said the PSX finally made a comeback on IMF deal optimism.

“Going forward, we recommend investors to avail any downside as an opportunity to buy in the banking, technology, and fertiliser sectors,” the brokerage said.

The highest increase was recorded in shares of Mari Petroleum, which rose by Rs48.38 to Rs1,729.95 per share, followed by Premium Tex., which increased by Rs34.99 to Rs764.99 per share. A major decline was noted in shares of Rafhan Maize, which fell by Rs409.67 to Rs9,950 per share, followed by Sapphire Tex. which decreased by Rs39.99 to Rs1,100 per share.

Ahsan Mehanti at Arif Habib Corp said stocks showed sharp recovery on the finance minister’s statement that the IMF bailout programme was likely to resume in a couple of days.

Surging global equities, an imminent accord with the IMF, and global crude oil prices led to a bullish close, Mehanti said.

Other stocks that recorded significant turnover included Cnergyico PK, Hum Network, Unity Foods Ltd, WorldCall Telecom, Telecard Limited, Pak Elektron, Ghani Global Holdings, and G3 Technologies.