Stocks jump as IMF deal prospects stir optimism

Stock jumped more than one percent on Wednesday in response to reports that Pakistan was near a staff level deal with the International Monetary Fund bailout programme.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 518.76 points or 1.25 percent to close at 41,862.77 points against 41,344.01 points recorded in the last session. The highest index of the day remained at 41,970.59 points while the lowest level of the day was recorded at 41,227.84 points. KSE-30 index also increased by 236.02 points or 1.50 percent to close at 15,963.65 points.

Traded shares rose by 65 million shares to 164.827 million shares from 99.088 million shares. The trading value increased to Rs6.488 billion from Rs4.041 billion. Market capital expanded to Rs7.015 trillion from Rs6.941 trillion. Out of 325 companies active in the session, 212 closed in green, 90 in red while 23 remained unchanged.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed sharply higher “as investors weigh imminent IMF bailout staff-level agreement and likely government decision to reduce POL prices impacting industrials”. “Institutional interest ahead of major earning announcements played a catalyst role in bullish close.”

Initially investors’ interest were witnessed in E&Ps sector as the economic coordination committee of the cabinet approved price increase by 43 percent to 235 percent for domestic gas consumers and industries. OGDC, PPL and SNGP closed higher.

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

“The index traded in the green zone as value buying was witnessed across the board, although the E&P sector remained in the limelight,” the brokerage said in a post market note. “Investors gained confidence in the expectation of resumption of the IMF program. Volumes stayed healthy on the mainboard.”

Reports of a staff-level agreement has been reached with IMF led the market to make an intraday high of 627 points where MEBL, TRG, LUCK, SYS and HBL spiked up cumulatively adding 118 in benchmark Index.

The highest increase was recorded in shares of Allawasaya Tex, which rose by Rs141.84 to Rs2,033.17 per share, followed by Exide (PAK), which increased by Rs19.70 to Rs282.42 per share. A major decline was noted in shares of Mehmood Tex., which fell by Rs40 to Rs800 per share, followed by Sanofi-Aventis, which decreased by Rs24.67 to Rs1,385.41 per share.

Sectors contributing to the performance include banks (+140.4 points), E&P (+102.6 points), technology (+71.4 points), cement (+65.0 points) and OMC’s (+35.2 points).

TPL Properties remained the volume leader with 14.938 million shares that closed higher by 94 paisas to Rs20.62 per share. It was followed by Sui North Gas with 13.938 million shares that increased by Rs2.38 to Rs39.75 per share.

Other stocks that recorded significant turnover included Oil & Gas Dev., Pak Refinery, Saif Power Ltd., Sui South Gas, WorldCall Telecom, Telecard Limited, Fauji Foods Ltd and TRG Pak Ltd.

Shares’ turnover in the future contracts increased to 49.814 million shares from 29.225 million shares.