Stocks gain as IMF signals tranche talks with new cabinet

Stocks rose on Friday as investors welcomed the International Monetary Fund’s readiness to resume talks on the second tranche review after the formation of a new cabinet, dealers said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 190.67 points, or 0.29 percent, to close at 65,793.76 points after touching a high of 66,067.53 points earlier in the session. The KSE-30 index fell by 105.08 points, or 0.48 percent, to close at 22,008.31 points.

The IMF said on Thursday it was ready to send a mission to Pakistan for the second review of its $3 billion loan programme. The fund's communications director, Julie Kozack, said the mission would take place shortly after the new cabinet was formed. The fund spokesman also said the IMF was open to discussing a new medium-term economic programme with Pakistan.

Analyst Nabeel Haroon at Topline Securities said the benchmark index largely traded in the positive zone during the day. “This positivity in the market can be attributed to the statement from the IMF that they are ready to send a mission to Pakistan after the formation of the cabinet.”

Traded shares increased by 127 million shares to 481.704 million shares from 354.153 million shares. The trading value rose to Rs16.992 billion from Rs14.435 billion. Market capital expanded by Rs24 billion to Rs9.354 trillion from Rs9.330 trillion. Of 357 companies active in the session, 208 closed in green, 119 in red and 30 remained unchanged.

Major positive contribution to the Index came from DAWH, EFERT, PSEL, SHEL and NRL, as they cumulatively contributed 175 points to the index.

The highest increase was recorded in Nestle Pakistan Limited shares, which rose by Rs160 to Rs8,050 per share, followed by Pakistan Services Limited, which increased by Rs29.99 to Rs894.99 per share. A significant decline was noted in Rafhan Maize Products Company Limited, which fell by Rs345 to Rs8,655 per share, followed by The Premier Sugar Mills, which closed lower by Rs23.75 to Rs460 per share.

“Stocks showed recovery after IMF affirmed its mission to hold a second review under SBA shortly with new cabinet on policies to ensure macroeconomic stability," said Ahsan Mehanti, an analyst at Arif Habib Corp.

"Dollar bonds rallied to Mar’22 peak, upbeat data on trade deficit shrinking by 30.2pc year-on-year for July-Feb’24 and strong rupee recovery played a catalytic role in bullish close."

K-Electric Ltd. remained the volume leader with 59.083 million shares and closed higher by 14 paisas to Rs4.83 per share. Cnergyico PK followed it with 51.468 million shares, which closed higher by 31 paisas to Rs4.89 per share.

The interest in the KEL can be attributed to news that the mediation process between K-Electric (KEL) and government entities has started.

Other significant turnover stocks included Kohinoor Spinning, Telecard Limited, Pak Refinery, Pak Elektron, WorldCall Telecom, Air Link Communication, Unity Foods Ltd and Fauji Foods Ltd.

In the Future’s Market, 313 companies recorded trading, of which 169 increased, 136 decreased and 8 remained unchanged.

Brokerage Arif Habib Ltd stated that the index recorded a weekly gain of +0.47 percent, maintaining a price range between 65-66k throughout the week.

"Looking ahead to the coming week, support remains robust, extending down to 65k. Market expectations are high for the KSE-100 index to surpass 66k and advance towards all-time highs," the brokerage stated.