Market watch: KSE-100 soars on progress in IMF talks

Benchmark index climbs 870.01 points to settle at 45,499.46

KARACHI:

The stock market staged a robust rally on Wednesday as reports of positive progress on talks between Pakistan and the International Monetary Fund (IMF) coupled with contraction in the September current account deficit rejuvenated investor interest.

Upbeat statements of State Bank of Pakistan Governor Reza Baqir and IMF Director for Middle East and Central Asia Jihad Azour about talks between Pakistan and the global lender renewed hopes for a resumption of IMF loan programme among investors and fuelled buying activity.

Besides, a significant month-on-month drop in the current account deficit to $1.11 billion in September painted a positive image of the economy and aided the momentum at the bourse.

Furthermore, optimism about exclusion of Pakistan from the Financial Action Task Force’s (FATF) grey list also strengthened investor confidence.

Earlier, trading began positively and the KSE-100 index remained in the green zone throughout the day. The market kept moving upwards in the initial hours but the uptrend flattened after midday and the index recorded range-bound trading towards the close. The market ended the day just below the 45,500-point mark.

At close, the benchmark KSE-100 index recorded an increase of 870.01 points, or 1.95%, to settle at 45,499.46.

A report of Arif Habib Limited stated that as the news of resumption of dialogue with an IMF team was relayed, investor concern over the loan package started dissipating, resulting in an upward swing in the KSE-100 index.

The index posted a total gain of 934 points and closed up by 870 points. Cement, technology, banking and fertiliser stocks remained in the limelight.

Cement stocks led the index on news of cement companies increasing prices per bag, whereas dwindling outflows from foreign counters in banking and fertiliser stocks helped the two sectors post healthy gains, the report said.

JS Global analyst Neelam Naz said that the KSE-100 index made an outstanding recovery, backed mainly by banking and cement sectors, and managed to close up by 870 points at 45,499.

On the results front, UBL announced 9MCY21 earnings per share of Rs17.76, up 42% year-on-year, with dividend payout of Rs4 per share.

 “Going forward, investors are advised to view any downward correction in the market as a buying opportunity mainly for blue-chip stocks,” the analyst said.

Overall trading volumes increased to 308.2 million shares compared with Monday’s tally of 248.3 million. The value of shares traded during the day was Rs10.4 billion.

Shares of 361 companies were traded. At the end of the day, 274 stocks closed higher, 79 declined and eight remained unchanged.

WorldCall Telecom was the volume leader with 49.5 million shares, gaining Rs0.25 to close at Rs2.53. It was followed by Hum Network with 24.8 million shares, gaining Rs0.36 to close at Rs6.50 and Byco Petroleum with 15.6 million shares, gaining Rs0.24 to close at Rs7.53.

Foreign institutional investors were net sellers of Rs122.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.