Market watch: Stocks rebound over ADB's $2.5b loan hint

Benchmark KSE-100 index gains 35.29 points to settle at 42,898.44

KARACHI:

The stock market staged a rebound on Thursday over indications that the ADB would provide $2.5 billion in loan coupled with optimism about the resumption of International Monetary Fund (IMF) loan programme, which rejuvenated investor interest.

The benchmark KSE-100 index made a significant recovery as investors were encouraged by the upbeat developments despite further depreciation of the rupee.

The overall optimism in the trading session tossed the KSE-100 index upwards, which touched an intra-day high at 43,032.50 points.

Earlier, the stock trading began on a negative note owing to speculation and the lack of developments in relation to the resumption of IMF loan programme. A range-bound session was observed throughout the day.

Late buying following the news about the Asian Development Bank (ADB)’s $2.5 billion loan encouraged market participants to take fresh positions and resultantly the market closed on a slightly positive note.

At close, the benchmark KSE-100 index recorded an increase of 35.29 points, or 0.08%, to settle at 42,898.44 points.

Topline Securities, in its report, said that the market opened on a negative note, however, a rebound was witnessed later during the trading session as investors lifted the market in anticipation of some stability on the political front.

The index closed in the green at 42,898, up 35 points day-on-day. Traded volumes stood at 285 million shares where Treet Corp (+4.6%), TPL Properties (+0.7%), Telecard (+3.8%), WorldCall Telecom (+0.7%) and Ghani Global Holdings (+4.1%) were the volume leaders, it said.

A report of Arif Habib Limited stated that stocks made recovery as investors weighed reports about the ADB’s approval of $2.5 billion worth of additional support funds for FY23 and anticipated positive outcome of the IMF programme review meeting due next week.

Mid-session pressure remained due to the global equity sell-off, weak rupee and slump in global crude oil prices, it said.

Speculation about likely release of $1 billion in IMF tranche under the $8 billion Extended Fund Facility and State Bank’s monetary policy announcement next week played the role of catalysts in the positive close, it added.

JS Global analyst Mohammad Waqar Iqbal said that the market opened on a negative note, however, a rebound was witnessed later during the trading session as investors lifted the market in anticipation of some stability on the political front.

“Going forward, we recommend investors to avail any dips as a buying opportunity in cement, banking and E&P sectors,” said the analyst.

Overall trading volumes decreased to 284.5 million shares compared with Wednesday’s tally of 338.5 million. The value of shares traded during the day was Rs7.8 billion.

Shares of 336 companies were traded. At the end of the day, 180 stocks closed higher, 137 declined and 19 remained unchanged.

Treet Corp was the volume leader with 27.6 million shares, gaining Rs1.37 to close at Rs31.45. It was followed by TPL Properties with 18.9 million shares, gaining Rs0.12 to close at Rs17.21 and Telecard Limited with 16.9 million shares, gaining Rs0.41 to close at Rs11.17.

Foreign institutional investors were net sellers of Rs117.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.