PSX hits another record, fuelled by IMF deal

KSE-100 index climbs 716.96 points, settles at 57,397.03

KARACHI:

Pakistan Stock Exchange (PSX) on Thursday soared to another record high as it crossed the 57,000-point barrier with an increase of more than 700 points on the back of investor enthusiasm over a staff-level agreement between Pakistan and the International Monetary Fund (IMF).

In the morning, trading began on a positive note but the KSE-100 index immediately took a dive because of worries over the imposition of windfall tax. It hit the intra-day low at 56,531.54 points in the first hour of trading.

Afterwards, the investors showed interest in buying stocks having attractive valuations and gradually lifted the market. The index touched its intra-day high at 57,549.26 after midday with the decline in T-bill yields and strengthening of Pakistani rupee providing a vital boost.

Positive contribution came from exploration and production (E&P) and fertiliser sectors.

“Stocks closed bullish after a staff-level agreement with the IMF for the release of $700 million loan tranche under the $3 billion standby arrangement (SBA), acknowledging government’s efforts to meet quarterly targets,” said Arif Habib Corp MD Ahsan Mehanti.

“Plunge in T-bill yields amid easing inflation, the IMF deal and rupee recovery played the role of catalysts in bullish close of the market.” At close, the benchmark KSE-100 index recorded an increase of 716.96 points, or 1.26%, and settled at 57,397.03.

Topline Securities, in its review, wrote that the KSE100 index surged beyond 57,000, concluding the trading session at a new record high of 57,397 with gains of 717 points.

It attributed the upward trend to the successful staff-level agreement reached between the IMF and Pakistani authorities. Furthermore, the T-bills’ auction held on Wednesday reinforced the market’s confidence that interest rates had peaked out and a reduction was imminent.

Read: Rupee recovers against USD as PSX crosses 57,000 points

During the day, E&P and fertiliser sectors contributed positively to the index as Oil and Gas Development Company, Pakistan Petroleum, Engro Fertilisers, Pakistan State Oil and Mari Petroleum added 427 points. Conversely, Bank AL Habib, Millat Tractors and Bank Alfalah pulled the index down by 63 points, Topline added.

Arif Habib Limited remarked that a strong rally, led by oil-related blue chips, took the index higher by more than 1% following a staff-level agreement with the IMF on its first review. “Oil and Gas Development Company (+6.63%), Pakistan Petroleum Limited (+7.24%), Engro Fertilisers (+4.37%) and Pakistan State Oil (+5.14%) were the biggest contributors to the index gains while Bank AL Habib (-1.97%) and Millat Tractors (-1.57%) came out as the biggest drags,” it said, adding that near-term support was seen at 56.8k.

JS Global analyst Muhammad Waqar Iqbal observed that the bullish trend persisted as the KSE100 surpassed the 57,500 mark, driven by optimism surrounding the staff-level agreement with the IMF on the second loan tranche.

“Treasury bill yields decreased 50 basis points, leading to anticipation of a rate cut,” the analyst said, adding that the sectors recommended for buying were technology and E&P.

Overall trading volumes increased to 1.1 billion shares compared with Wednesday’s tally of 661.6 million. The value of shares traded during the day was Rs28.9 billion. Shares of 374 companies were traded. Of these, 235 stocks closed higher, 118 dropped and 21 remained unchanged.

WorldCall Telecom was the volume leader with trading in 386.4 million shares, gaining Rs0.19 to close at Rs1.59. It was followed by Cnergyico PK with 45.1 million shares, losing Rs0.04 to close at Rs4.70 and Pakistan Refinery with 39.6 million shares, gaining Rs0.73 to close at Rs24.97.

Foreign investors were net buyers of shares worth Rs164.3 million, according to the NCCPL.