Market watch: Uptrend continues at PSX ahead of IMF meeting

Benchmark KSE-100 index rises 444.65 points to settle at 46,119.15

KARACHI:

The ongoing rally continued at the Pakistan Stock Exchange on Wednesday and the KSE-100 index breached the 46,000-point mark as investors anticipated the resumption of International Monetary Fund (IMF) loan programme.

The IMF board was set to meet late on Wednesday and review Pakistan’s case as the country met its prior conditions. Market participants strongly expected the IMF to green-light the resumption of loan programme and approve the next tranche of $1 billion.

The revival of the programme is expected to improve the macroeconomic indicators and restore the confidence of foreign investors in Pakistan.

Moreover, encouraged by the government of Pakistan securing $1 billion through a Sukuk issue, the market players resorted to fresh buying.

Furthermore, consistent appreciation of the rupee against the US dollar revived the interest of investors, who cherry-picked stocks throughout the day.

A sharp increase in inflation to a two-year high of 13% in January 2022 failed to have a significant impact on the market as participants continued to pour liquidity.

Earlier, trading began with a jump and the uptrend remained firmly in place for the rest of the session. The rally flattened towards midday but cheerful investors took fresh positions, accelerating the gains.

At close, the benchmark KSE-100 index recorded an increase of 444.65 points, or 0.97%, to settle at 46,119.15.

A report of Arif Habib Limited stated that bullish momentum was witnessed at the bourse due to growing optimism about the IMF’s announcement.

The IMF Executive Board was scheduled to take up the sixth review of the $6 billion Extended Fund Facility (EFF) for Pakistan in its meeting on Wednesday.

“The market opened on a positive note and stayed in the green zone throughout the day,” the report said.

In the banking sector, Bank Alfalah announced 4QCY21 results in line with market expectations.

“Activity continued to remain sideways as market witnessed hefty volumes in third-tier stocks,” the report said.

JS Global analyst Waqar Iqbal said that the benchmark KSE-100 index closed at 46,119, gaining 445 points day-on-day.

The market expected that the outcome of IMF meeting would be positive since all required conditions had been fulfilled, he said.

Top volume leaders of the day were Hum Network (+6.3%), Telecard Limited (+4.4%) and Treet Corporation (+3.3%).

“Going forward, we expect the market to perform well and recommend investors to accumulate stocks on dips,” the analyst said.

Overall trading volumes increased to 360.8 million shares compared with Tuesday’s tally of 312.5 million. The value of shares traded during the day was Rs10.9 billion.

Shares of 381 companies were traded. At the end of the day, 269 stocks closed higher, 91 declined and 21 remained unchanged.

Hum Network was the volume leader with 48.8 million shares, gaining Rs0.45 to close at Rs7.65. It was followed by Telecard Limited with 28.3 million shares, gaining Rs0.77 to close at Rs18.42 and Treet Corporation with 26.3 million shares, gaining Rs1.37 to close at Rs42.31.

Foreign institutional investors were net sellers of Rs302.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.