Market watch: KSE-100 soars on expectation of IMF loan approval

Benchmark index increases 589.44 points to settle at 34,896.55

KARACHI: The stock market extended its bullish streak on Wednesday and climbed 589 points as investors anticipated approval of a $6-billion bailout package by the International Monetary Fund (IMF) executive board, which was scheduled to meet later in the day.

The KSE-100 index shot up at the start of trading and remained on the uptrend till the day's end. A few dips, seen during the session, were corrected timely.

The optimism over the IMF bailout helped the market inch closer to the 34,900-point mark. Majority of the index-heavy sectors remained in the positive zone.

According to a report of Aba Ali Habib Securities, the rally was supported by domestic positive cues coming from expected approval of the $6-billion facility in the IMF's board meeting and increase in the value of the rupee against the US dollar.

Investors' confidence seemed to have returned to the bourse as the benchmark index had surged about 994 points in the past three sessions, it added.

At the end of trading, the benchmark KSE 100-share Index recorded an increase of 589.44 points, or 1.72%, to settle at 34,896.55.

Arif Habib Limited, in its report, stated that the KSE-100 index rose again, this time gaining 631 points, supported mainly by fertiliser and banking sectors as well as by the cement sector.

"Positive expectation about the IMF deal conclusion kept sentiments elevated and helped investors take bets on oil and gas marketing companies, cement-makers, banks and fertiliser producers," it said.

The cement sector dominated trading volumes for better part of the day, however, chemical companies took over the slot in the closing hour. Lotte Chemical generated most of the volumes with trading in 11.6 million shares followed by TRG Pakistan at 8 million shares, the report said. The KSE All-Share volumes also improved, it added.

JS Global analyst Maaz Mulla said the bourse concluded trading on a positive note as the benchmark KSE-100 index closed up by 589 points at 34,896.

The market kicked off positive, hitting the day's high at 631 points, he said. Major heavyweights that attracted investors were Fauji Fertiliser (+5%), Pakistan Petroleum (+2.8%), HBL (+2.5%), Oil and Gas Development Company (+2.3%), MCB Bank (+2.4%) and Lucky Cement (+3.3%).

Traded volumes increased by 43% day-on-day to 130 million shares while traded value rose to $30 million.

On the news front, the Consumer Price Index (CPI) recorded an increase of 0.4% in June 2019 as compared to the preceding month while a rise of 8.9% was registered against June 2018.

Investors' interest was witnessed in cement and banking sectors where DG Khan Cement (+5%), Maple Leaf Cement (+5%), Pioneer Cement (+5%), Fauji Cement (+4.6%), Lucky Cement (+3.3%), Bank AL Habib (+0.8%), HBL (+2.5%) and UBL (+1.4%) remained in the green zone.

Moreover, Fauji Fertiliser Bin Qasim (+5.3%) and Fauji Fertiliser Company (+5%) from the fertiliser sector gained ground. "Moving forward, we recommend investors to buy on dips," the analyst said.

Overall, trading volumes increased to 130.4 million shares compared with Tuesday's tally of 91.2 million. The value of shares traded during the day was Rs4.8 billion.

Shares of 333 companies were traded. At the end of the day, 239 stocks closed higher, 81 declined and 13 remained unchanged.

Lotte Chemical was the volume leader with 11.7 million shares, gaining Rs0.91 to close at Rs17.18. It was followed by TRG Pakistan with 8 million shares, gaining Rs0.67 to close at Rs17.87 and Unity Foods with 7.4 million shares, gaining Rs0.13 to close at Rs11.17.

Foreign institutional investors were net sellers of Rs144.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.