Stocks reach new peak as IMF loan nears approval

Stock closed higher on Tuesday, reaching another record high, as investors were optimistic about the prospects of receiving the first loan tranche from the International Monetary Fund (IMF) next month, dealers said.

The market was buoyed by reports that the IMF board meeting to approve a staff-level agreement on the $700 million loan tranche under the standby agreement for Pakistan could take place in the first week of December, they added.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 293.63 points or 0.51 percent to close at 57,371.59 points. The highest index of the day remained at 57,691.22 points while the lowest level was recorded at 57,176.46 points. The KSE-30 index also gained by 68.14 points or 0.36 percent to close at 19,046.54 points.

Traded shares surged by 294 million shares to 1.012 billion shares from 718.285 million shares. The trading value decreased to Rs19.338 billion from Rs16.686 billion. Market capital rose to Rs8.322 trillion against Rs8.295 trillion. Out of 390 companies active in the session, 231 closed in green, 143 in red and 16 remained unchanged.

Analyst Ahsan Mehanti at Arif Habib Corp, said stocks closed new all-time high amid record trades on upbeat data on current account deficit narrowing to $74 million in Oct’23, falling by 91pc year-on-year and IMF board approval for SLA due on Dec 7 paving way for $700m disbursement next month.

"The IMFs completion of first quarterly review under SBA with most quantitative targets complied, surge in global crude oil prices and reports of surging dollar denominated govt bond prices played a catalytic role in record close."

Analyst Naveed Nadeem at Topline Securities said stocks continued their upward trajectory, gaining 0.51 percent. "This positive momentum was driven by the tentative scheduling of the executive board of the IMF for December 7 to approve the SLA with Pakistan. Additionally, current account deficit stood at $74 million in October 2023, compared to $46 million in September 2023."

Throughout the day, the power, banks, fertilizer, and cement sectors made positive contributions, with HUBC, UBL, FFBL, LUCK, and BAHL collectively adding 181 points to the index. Conversely, OGDC, COLG, and PPL collectively caused a loss of 68 points.

The highest increase was recorded in Unilever Foods XD, which rose by Rs499.85 to Rs23,000 per share, followed by Rafhan Maize, which increased by Rs207.16 to Rs10,550 per share. A significant decline was noted in Colgate Palm, which fell by Rs34.71 to Rs1,648.17 per share, followed by Bata (Pak), which decreased by Rs32.44 to Rs1,656.56 per share.

Brokerage Arif Habib Ltd said the PSX saw near-term support firmly holding at 56,800, enabling the index to embark on a new trading range between 56,800 and 57,800 points. "This development comes as the market dynamics continue to unfold."

In a notable event, AIRLINK PA (-5.9 percent) observed a record trade volume of 22.8 million shares. As the stock approached its all-time high, it is expected to enter a consolidation phase, presenting a potential buying opportunity in the near future.

WorldCall Telecom remained the volume leader with 254.276 million shares which closed higher by 5 paisas to Rs1.67 per share. It was followed by K-Electric Ltd. with 63.355 million shares, which closed lower by 4 paisas to Rs3.51 per share.

Other significant turnover stocks included Hum Network, Fauji Foods Ltd, Silk Bank Ltd, B.O. Punjab, Pak Refinery, Fauji Fert Bin, Pak Elektron and Telecard Limited. Shares’ turnover in the future contracts increased to 369.792 million shares from 258.030 million shares.