IMF review conclusion props up stocks
Pakistan Stock Exchange (PSX) on Monday notched up significant gains as the benchmark KSE-100 index touched the intra-day high of nearly 1,100 points before settling with an increase of 663 points.
The surge was driven by a host of factors, including the successful conclusion of the International Monetary Fund (IMF) review, resulting in notable progress towards securing the second $1 billion loan tranche under the Extended Fund Facility (EFF).
Analysts pointed out that the bullish momentum was further fuelled by the IMF's decision to lower the tax collection target for FY25 and rising global crude oil prices. The market also responded strongly to the government's steps to clear the circular debt pile-up.
According to Ahsan Mehanti of Arif Habib Corp, stocks closed higher after the IMF review concluded with significant progress towards a staff-level agreement for the release of over $1 billion in loan tranche and speculation about the likely approval of over $1 billion worth of Climate Resilience Facility.
He added that the reduction in FY25 tax collection target by the IMF to Rs12.37 trillion, surging international crude oil prices and the bull-run in global equities played the role of catalysts in bullish close at the PSX.
At the end of trading, the benchmark KSE-100 index recorded an increase of 663.42 points, or 0.57%, and settled at 116,199.59.
In its review, Topline Securities commented that the stock market experienced a positive session, with the benchmark index reaching the peak of 1,091 points. It closed at 116,199, marking a gain of 663 points.
The positive performance was influenced by the government's initiatives to tackle the power-sector circular debt, though a Rs1.25 trillion deal still awaited final approval. Furthermore, the IMF described the progress on its $7 billion loan programme as "strong," despite the absence of a staff-level agreement, the brokerage house said.
The market's gains were mainly driven by Mari Petroleum, Pakistan State Oil (PSO), Lucky Cement, Oil and Gas Development Company (OGDC) and The Searle Company, which collectively added 658 points to the index. Conversely, Fauji Fertiliser Company, Engro Fertilisers and Hub Power dragged the index down by 200 points, Topline noted.
Arif Habib Limited (AHL) stated that the KSE-100 index saw an accelerated upside momentum at the start of the week to cross 116,000 points.
Some 49 shares rose while 45 fell, with Mari Petroleum (+7.32%), PSO (+4.3%) and Lucky Cement (+1.97%) contributing the most to the index gains, it said. Mari Petroleum made a gas and condensate discovery at the Spinwam-I well, having gas flow at 20.485 million cubic feet per day and condensate flow at 117 barrels per day.
AHL pointed out that Pakistan's government raised the tax on petroleum to meet IMF's expectations before the lender could release the next loan tranche. "Support is at 115,000 points, against which new all-time highs should be hit in the near term," it added.
JS Global analyst Muhammad Hasan Ather noted that the PSX resumed its bullish momentum on the back of positive updates regarding the IMF review. The index surged to the intra-day high of 116,627 (+1,090 points) before profit-taking pared gains. It closed at 116,199 (+663 points).
Looking ahead, the market was expected to maintain its bullish momentum, supported by the anticipated resolution of circular debt issue and a favourable outcome of the IMF review, the analyst added.
Overall trading volumes increased to 507.5 million shares compared with Friday's tally of 360.5 million.
Shares of 448 companies were traded. Of these, 179 stocks closed higher, 211 fell and 58 remained unchanged. The value of shares traded during the day was Rs34.1 billion.
Pak Electron was the volume leader with trading in 48.3 million shares, gaining Rs2.92 to close at Rs45.54. It was followed by The Bank of Punjab with 46.6 million shares, gaining Rs0.38 to close at Rs11.67 and Pakistan International Bulk Terminal with 36.4 million shares, gaining Rs0.26 to close at Rs10.18. During the day, foreign investors sold shares worth Rs362.8 million, the NCCPL reported.
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