Stocks rally on CM elections, IMF loan prospects

Stocks rose on Monday as investors cheered the election of provincial chief ministers and the government's efforts to secure IMF loans and climate financing, dealers said.

The political situation improved with the election of Maryam Nawaz in Punjab and Murad Ali Shah in Sindh, easing some of the uncertainty that followed the general elections on Februray 8, they said.

The government is also seeking up to $8 billion in loans from the International Monetary Fund to boost its foreign exchange reserves and support economic growth.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 490.11 points or 0.78 percent to close at 63,305.93 points. The highest index of the day remained at 63,732.50 points while the lowest level was recorded at 62,915.40 points. The KSE-30 index also increased by 162.72 points or 0.77 percent to close at 21,296.23 points.

“Bullish activity witnessed as investors weigh easing political noise after CMs elected for Sindh and Punjab,” said Ahsan Mehanti, an analyst at Arif Habib Corp. "Midsession pressure remained on concerns for the political outcome of the national assembly session convening delays by the President Alvi".

The government efforts to gain up to $8 billion IMF loans quota for EFF and climate financing under Special Drawing Rights (SDRs) played a catalyst role in the bullish close in the post-poll rally at the PSX, he added.

Traded shares increased by 75 million shares to 452.868 million shares from 377.974 million shares. The trading value rose to Rs16.491 billion from Rs16.011 billion. Market capital expanded to Rs9.131 trillion against Rs9.081 trillion. Of 345 companies active in the session, 207 closed in green, 114 in red and 24 remained unchanged.

Analyst Maaz Mulla at Topline Securities said the benchmark index started the day on a buoyant note, witnessing an initial surge with an intra-high of +916.69 points (up by 1.46 percent).

“This bullish momentum in the market finds its roots in initiating the provincial government formation process. Notably, the Punjab Assembly elected Maryam Nawaz as its Chief Minister in Punjab, while the Sindh Assembly elected Murad Ali Shah Chief Minister Sindh. The smooth progression towards government formation at provincial levels has bolstered investor confidence,” Mulla said.

The Election Commission of Pakistan (ECP) is gearing up to conduct the presidential election on March 9.

The highest increase was recorded in Pakistan Tobacco Company Limited, which rose by Rs35 to Rs1,080 per share, followed by Sazgar Engineering Works Limited, which increased by Rs24.61 to Rs352.72 per share. A significant decline was noted in Unilever Pakistan Foods Limited, which fell by Rs654.17 to Rs21,145 per share, followed by Nestle Pakistan Limited, which closed lower by Rs330.11 to Rs7,580 per share.

Analyst Mohammed Waqar Iqbal at JS Research said political clarity and better financial results fuelled the market momentum. “Going forward, a cautious approach is recommended, investors are advised to sell on strength,” he said.

K-Electric Ltd. remained the volume leader with 54.064 million shares which closed higher by 5 paisas to Rs4.44 per share. Kohinoor Spining followed it with 53.374 million shares, which closed lower by 2 paisas to Rs4.57 per share.

Other significant turnover stocks included WorldCall Telecom, Pak Refinery, Cnergyico PK, Air Link Commun, Oil & Gas Dev., Unity Foods Ltd, Pak Petroleum and Pak Int. Bulk.

In Future’s Market, 315 companies recorded trading, of which 234 increased, 78 decreased and 3 remained unchanged.