Stocks gain modestly on IMF deal optimism

KSE-100 index adds 190.67 points, settles at 65,793.76

KARACHI:

Pakistan Stock Exchange on Friday modestly rose by nearly 200 points as investors cheered the International Monetary Fund’s (IMF) willingness to negotiate a new loan programme to help Pakistan address its economic woes.

Investor sentiment got a boost from the new government’s promises to steer the country out of economic instability.

In the morning, trading kicked off on a healthy note and the benchmark KSE-100 index remained at higher levels until midday despite some wide fluctuations. It reached the intra-day high of 66,067.53 points in the second half.

A rally in dollar bonds and shrinking of trade deficit by 30.2% year-on-year (YoY) in Jul-Feb FY24 triggered the positive momentum in the market.

Meanwhile, the State Bank reported that workers’ remittances reached $2.25 billion in February, showing a decrease of 6.2% month-on-month and increase of 13% YoY.

“Stocks showed recovery after the IMF affirmed that its mission would hold a second review under the standby arrangement shortly to ensure macroeconomic stability,” said Arif Habib Corp MD Ahsan Mehanti.

“Dollar bonds’ rally to March 2022 peak, upbeat data of trade deficit that shrank 30.2% YoY for Jul-Feb FY24 and strong rupee recovery played the role of catalysts in bullish close at the PSX,” he added.

At close, the benchmark KSE-100 index recorded modest gains of 190.67 points, or 0.29%, and settled at 65,793.76.

Topline Securities, in its report, said that the KSE-100 index largely traded in the positive zone and closed at 65,794, up 0.3%.

“This positivity in the market can be attributed to the IMF’s statement that they are ready to send a mission to Pakistan after formation of the cabinet,” it said.

Major positive input came from Dawood Hercules Corporation, Engro Fertilisers, Pakistan Services, Shell Pakistan and National Refinery, which contributed 175 points to the index.

Read: Stocks soar over prospect of coalition govt

Investor participation
increased as traded volumes and value for the day stood at 482 million shares (up 36%) and Rs17 billion (up 18%), respectively, Topline added.

JS Global analyst Mubashir Anis Naviwala wrote in his report that the stock market opened on a positive note with notable activity in exploration and production, oil marketing companies and refinery sectors.

K-Electric (+3%), Cnergyico Pakistan (+6.8%), Kohinoor Spinning Mills (+7.8%), Telecard Limited (+9.1%) and Pakistan Refinery (+2.5%) were the volume leaders, he said.

“Going forward, we recommend investors to adopt a buy-on-dips strategy in banking, exploration and production and technology sectors,” the analyst added.

Overall trading volumes increased to 481.7 million shares against Thursday’s tally of 354.2 million. The value of shares traded during the day was Rs16.99 billion.

Shares of 357 companies were traded. Of these, 208 stocks closed higher, 119 dropped and 30 remained unchanged.

K-Electric was the volume leader with trading in 59.1 million shares, gaining Rs0.14 to close at Rs4.83. It was followed by Cnergyico PK with 51.5 million shares, gaining Rs0.31 to close at Rs4.89 and Kohinoor Spining Mills with 45.9 million shares, gaining Rs0.40 to close at Rs5.52.

Foreign investors were net sellers of shares worth Rs58.3 million, according to the NCCPL.

Published in The Express Tribune, March 9^th, 2024.

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