Stocks hit record high on IMF optimism

KSE-100 index surges 764.28 points, settles at 82,247.92

KARACHI:

In a significant development, the Pakistan Stock Exchange (PSX) surged to an all-time high as political calm and anticipation of approval of a $7 billion Extended Fund Facility (EFF) of the International Monetary Fund (IMF) bolstered investor confidence.

In the morning, trading got off to a lacklustre start with the KSE-100 index hitting its intra-day low of 81,524.41 points before midday owing to losses in the prior session. However, as the day progressed, investor interest shifted, helping the index climb rapidly.

Key factors fueling the bullish momentum included the falling government bond yields amid easing inflation, rising global crude oil prices and a strengthening rupee.

The combination of positive economic indicators helped the bourse break through the critical 82,000-point barrier to touch its intra-day high of 82,331.85 towards the close of trading. The market ended near its peak with significant gains.

"Stocks closed at an all-time high on easing political noise and speculation ahead of the IMF executive board meeting for approval of a $7 billion EFF," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

"Falling government bond yields amid receding inflation, surging global crude oil prices and rupee recovery played the role of catalysts in bullish close at the PSX."

At the end of trading, the KSE-100 index recorded gains of 764.28 points, or 0.94%, and settled at 82,247.92.

Topline Securities, in its report, commented that the KSE-100 index wrapped up the trading session at 82,248, marking an increase of 764 points.

"A broad wave of buying was seen with major players like MCB Bank, Oil and Gas Development Company, the National Bank of Pakistan, United Bank and Bank AL Habib making significant gains and contributing 373 points to the overall rise," Topline said.

Arif Habib Limited (AHL) noted "Pakistan is poised for an upside acceleration with the KSE-100 targeting 86,000."

Some 72 shares rose while 25 fell with MCB Bank (+4.8%), Oil and Gas Development Company (+3.22%) and the National Bank of Pakistan (+5.35%) being the biggest contributors to index gains, it said.

Fauji Fertiliser (-1.25%), Hub Power (-0.68%) and Fauji Fertiliser Bin Qasim (-1.11%) were the largest index drags. Cement stocks were sharply higher, which included Fauji Cement (+3.95%), Maple Leaf Cement (+3.05%) and DG Khan Cement (+1.87%), AHL added.

JS Global analyst Mubashir Anis Naviwala said that investor sentiment was buoyed by expectations of positive developments regarding the IMF loan approval.

Significant interest was observed in banking, exploration and production, power generation and fertiliser sectors, he said. "Looking ahead, we recommend a buy-on-dips strategy with special focus on banking, fertiliser, E&P and technology sectors," the analyst added.

Overall trading volumes increased to 422.2 million shares compared with Tuesday's tally of 369.6 million. The value of shares traded during the day was Rs18.4 billion.

Shares of 437 companies were traded. Of these, 248 stocks closed higher, 126 declined and 63 remained unchanged.

Kohinoor Spinning was the volume leader with trading in 51.9 million shares, gaining Rs0.88 to close at Rs8.92. It was followed by WorldCall Telecom with 29.7 million shares, remaining unchanged at Rs1.25 and Pace (Pak) Ltd with 25.4 million shares, gaining Rs0.68 to close at Rs5.91.

During the day, foreign investors sold shares worth Rs719.5 million, according to the NCCPL.