Stocks extend gains on rupee strength

Stocks ended higher for a second straight session on Thursday, helped by renewed risk appetite among investors as hopes grew for an IMF loan deal.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index increased by 356.50 points or 0.87 percent to close at 41,425.37 points. The highest index of the day remained at 41,630.63 points while the lowest level of the day was recorded at 41,068.87 points. KSE-30 index also gained 90.52 points or 0.58 percent to close at 15,660.10 points.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks continued the bullish trend in earnings season on surging global equities, firm bond yields and sharp rupee recovery amid SBP crackdown on exchange firms.

“Reports of China's rollover of debt, and IMF affirmations on final conditions met for release of bailout funds played key roles in the bullish activity.”

Traded shares dropped by 58 million shares to 275.431 million shares from 333.028 million shares. The trading value decreased to Rs7.904 billion from Rs10.016 billion. Market capital expanded to Rs6.960 trillion from Rs6.926 trillion. Out of 343 companies active in the session, 212 closed in green, 107 in red while 24 remained unchanged.

Analyst Mubashir Anis Naviwala at JS Research said the market witnessed a bull run for a second consecutive day post clarity regarding the IMF program and strengthening of rupee against dollar. Investor participation increased across the board. “Going forward, we recommend investors to adopt a 'buy-on-dips' strategy for cement, banks, and E&P sectors.”

The highest increase was recorded in shares of Allawasaya Tex, which rose by Rs253.01 to Rs671.87 per share, followed by Premium Tex., which increased by Rs46.87 to Rs671.87 per share. A significant decline was noted in shares of Sanofi-Aventis, which fell by Rs65 to Rs1,270 per share, followed by Colgate Palm, which decreased by Rs47.99 to Rs2,390.01 per share.

Analyst Muhammad Arbash at Topline Securities said equities continued its positive momentum. “Rupee strengthening and China rolled over $2 billion loan in safe deposits and decline in international oil prices led the market to open on a positive note where market made an intraday high of 356 points,” he said.

A report of Arif Habib Ltd said the positive momentum continued at the market as investors remained active throughout the day. “The market traded in the green zone as the rupee continued its upsurge against the dollar. Mainboard activity remained active although hefty volumes were witnessed in the 3rd tier stocks.”

Sectors contributing to the performance included banks (+129.18 points), cements (+75.9 points), fertilizer (+25.8 points), textiles (+24.7 points) and OMC’s (+19.6 points). MCB, HBL, MEBL and UBL closed higher.

WorldCall Telecom remained the volume leader with 44.405 million shares that increased by 4 paisas to Rs1.23 per share. It was followed by TPL Properties with 12.197 million shares that closed lower by 20 paisas to Rs19.72 per share.

Other stocks that recorded significant turnover included Pak Elektron, Pak Refinery, Unity Foods Ltd, Cnergyico PK, G3 Technologies, Waves Singer, TRG Pak Ltd and Cordoba Logist.

Shares’ turnover in the future contracts decreased to 74.556 million shares from 114.116 million shares.