Market watch: Stocks rise on hopes of IMF loan resumption

Benchmark KSE-100 index adds 178.69 points to settle at 43,040.14

KARACHI:

The Pakistan Stock Exchange managed to post decent gains on Monday, as investors opted to assume fresh positions amid fresh hopes for the resumption of the much-awaited International Monetary Fund’s (IMF) loan programme.

The benchmark KSE-100 index, after staying in the positive territory throughout the day, added around 179 points to finally settle above the psychological barrier of 43,000 points.

The finance minister’s remarks that the IMF’s loan programme may be resumed in June 2022 coupled with the appreciation of the rupee against the US dollar rejuvenated the interest of market players.

Earlier, the session commenced on a bullish note, as the benchmark KSE-100 index soared to an intra-day high of 43,258 points during the initial hours of trading.

However, just before the end of first half, it dipped to around 42,903 points mainly due to profit-taking. The second half again witnessed buying interest as the index gradually inclined to finally settle in the green zone.

At close, the benchmark KSE-100 index recorded an increase of 178.69 points, or 0.42%, to settle at 43,040.14 points.

Topline Securities, in its report, said that Pakistan equities closed positive where the benchmark KSE-100 index settled at 43,040 points.

The market opened on a positive note as the finance minister stated that the IMF’s staff-level agreement was expected in June 2022, which led the index to touch an intra-day high of 396 points, it said.

“Initial gains were led by Oil and Gas Development Company (OGDC) as the Economic Coordination Committee (ECC) was going to decide on the conversion of Rs202.8 billion worth of Term Finance Certificates (TFC) of OGDC into Pakistan Investment Bonds (PIBs),” Topline said, adding “investors’ interest was also witnessed in Sui Northern Gas Pipelines Limited (SNGPL), which led the stock to close at its upper limit.”

A report of Arif Habib Limited stated that the market opened in the positive zone and remained in the green throughout the day on expectation of the resumption of IMF programme in June 2022, which also helped the rupee to get stronger against the US dollar.

Main board activity remained healthy in the exploration and production sector, it said. “OGDC was in the limelight due to expectation of a nod from the ECC to convert the company’s receivables into PIBs.”

Good volumes were witnessed in third-tier stocks, the report said.

Sectors contributing to the performance included exploration and production (+79.4 points), oil marketing companies (+24.8 points), technology (+23.2 points), autos (+20.1 points) and banks (+13.5 points).

JS Global analyst Mohammad Waqar Iqbal said that the market remained in the positive zone and closed above the 43,000-point level.

TPL Properties, Pak Refinery, Cnergyico PK, Ghani Global Holdings and OGDC were the volume leaders.

“Going forward, any news related to budgetary measures is expected to set the direction of investors’ sentiment,” the analyst said, adding “we advise a sell-on-strength strategy.”

Overall trading volumes decreased to 187.5 million shares compared with Friday’s tally of 527.7 million. The value of shares traded during the day was Rs6.1 billion.

Shares of 335 companies were traded. At the end of the day, 138 stocks closed higher, 179 declined and 18 remained unchanged.

TPL Properties was the volume leader with 18.5 million shares, gaining Rs0.66 to close at Rs19.28. It was followed by Pak Refinery with 17.2 million shares, gaining Rs0.03 to close at Rs17.82 and Cnergyico PK with 9.97 million shares, losing Rs0.08 to close at Rs5.65.

Foreign institutional investors were net sellers of Rs140.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.