Market watch: Stocks rally due to clarity about IMF package

Benchmark KSE-100 index adds 520.23 points to settle at 46,073.25

KARACHI:

The Pakistan Stock Exchange rallied on Monday as investors were observed cheering the news of successful completion of talks with the International Monetary Fund (IMF) about the loan programme.

Pakistan and the IMF agreed, in principle, to extend the stalled bailout programme by up to one year and increase the loan size to $8 billion.

Subsequently, investors’ participation remained healthy across the board as the benchmark KSE-100 index opened the session on a positive note and remained in the green throughout the day.

Moreover, fresh appreciation of the rupee against the US dollar coupled with some better-than-expected corporate results also enticed market players to assume fresh positions.

Earlier, the trading session started on a positive note as the benchmark index rallied and touched an intra-day high at 46,204 points.

Moving forward, the index oscillated in a narrow range due to some profit-taking at attractive valuations but stayed in the positive territory, to finally settle above the 46,000-point level.

At close, the benchmark KSE-100 index recorded an increase of 520.23 points, or 1.14%, to settle at 46,073.25 points.

Topline Securities, in its report, said that Pakistan equities initiated the week on a jubilant note on account of news flow regarding meaningful dialogue between Pakistan authorities and the IMF to resume the Extended Fund Facility (EFF) programme.

“The market opened in the green zone and touched an intra-day high of 651 points, however, profit-taking took place at the day’s highs, which pushed the index a little lower to eventually settle at 46,073 points,” Topline said.

During the trading hours, DG Khan Cement announced higher-than-expected third-quarter 2021-22 earnings per share of Rs3.56, down 28% year-on-year but up 21% on a quarter-on-quarter basis.

Moreover, Meezan Bank Limited announced first-quarter (Jan-Mar) 2022 earnings per share of Rs5.7, up 51% year-on-year and 5% quarter-on-quarter. “The result is in line with market expectations,” Topline said, adding that the bank announced a dividend per share of Rs1.75.

Mari Petroleum Company also announced third-quarter 2021-22 earnings per share of Rs81.63, up 57% year-on-year and 46% quarter-on-quarter, which was in line with industry expectations.

“Fertiliser, technology, chemical and power-sector stocks contributed positively to the benchmark index where Fauji Fertiliser Company, Systems Limited, Engro Fertilisers, Engro Polymer and Chemicals and Hub Power Company added 251 points cumulatively,” Topline said.

“On the flip side, Cnergyico PK, Maple Leaf Cement, Pakistan Telecommunication Company and National Bank of Pakistan witnessed profit-taking as they lost 27 points collectively,” it added.

A report of Arif Habib Limited stated that the Pakistan Stock Exchange celebrated the resumption of successful IMF talks, which helped the benchmark KSE-100 index to open in the green zone.

There was across-the-board investor participation, which helped the index to stay in the green zone throughout the day. Hefty volumes were witnessed in third-tier stocks, it said.

Sectors contributing to the performance included fertiliser (+156.9 points), banks (+72 points), technology (+58.4 points), chemicals (+53.1 points) and power (+44 points), AHL said.

JS Global analyst Neelam Naz said that after previous week’s corrective sessions, bulls made a comeback on the back of clarity about the IMF programme, as the global lender reportedly agreed to extend the bailout package with an increase in loan size to $8 billion.

Hum Network (+3.7%), Telecard Limited (-7.1%), WorldCall Telecom (-5.5%), G3 Technologies (-2.4%) and Ghani Global Holdings (-3.1%) cumulatively contributed 44% to the total volumes, she said.

Interest was witnessed in Pakistan State Oil on the back of expected increase in petrol prices as per IMF’s demand.

Major index leaders were Fauji Fertiliser Company, Engro Fertilisers, Engro Polymer and Chemicals, Hub Power Company and Systems Limited, she said.

“Going forward, we recommend investors to avail any dips below 46,000 as a buying opportunity in the refineries, banking, oil and gas and cyclical sectors,” the analyst said.

Overall trading volumes increased to 368.8 million shares compared with Friday’s tally of 217.6 million. The value of shares traded during the day was Rs9.7 billion.

Shares of 325 companies were traded. At the end of the day, 163 stocks closed higher, 148 declined and 14 remained unchanged.

Hum Network was the volume leader with 46.9 million shares, gaining Rs0.3 to close at Rs8.51. It was followed by Telecard Limited with 35.5 million shares, losing Rs1.08 to close at Rs14.21 and WorldCall Telecom with 31.99 million shares, losing Rs0.1 to close at Rs1.71.

Foreign institutional investors were net buyers of Rs415.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.