KSE-100 rises 0.81% on optimism over resolution of gas sector circular debt

The Pakistan Stock Exchange (PSX) continued to maintain a bullish trend on Tuesday, as the benchmark KSE -100 Index registered a gain of 0.81% owing to investor optimism over the resolution of circular debt in the gas sector.

Moreover, hopes of a positive outcome from Pakistan’s meetings with the International Monetary Fund (IMF) drove buying activity.

By the end of the session, the KSE-100 Index was up 331.99 points or 0.81% to close at 41,522.76 points.

KSE-100 jumps over 700 points amid return of positive sentiment

Trading kicked off with a jump and the index rose to an intra-day high in the first few hours of today’s session. Some gains were erased as the session progressed but the market still closed in the green.

A report from Arif Habib Limited noted that the index “continued to trade with cheerful sentiments throughout the trading session, reaching an intra-day high of 573.18 points in expectation of approval for the release of 9th tranche of the IMF’s Extended Fund Facility during the ongoing negotiations.”

Investors’ participation remained adequate in exploration and production sector on wake of the resolution of gas circular debt, it said, adding that healthy volumes were observed across the board.

Experts said that the exploration and production sector remained in the spotlight following news that the government is considering settling the gas sector’s outstanding circular debt.

“Reports pertaining to the resolution of circular debt by the government in the gas sector is driving the positive trend in the market, which is being reflected in stocks of OGDC (Oil and Gas Development Company Limited), SSGC (Sui Southern Gas Company Limited) and others trading in green,” said Sana Tawfik, an analyst at Arif Habib Limited.

Technical-level talks between Pakistan and the International Monetary Fund (IMF) team are said to have concluded on Monday, with policy-level discussions starting from today (Feb 7).

Sources on condition of anonymity told Business Recorder that the power sector’s untargeted subsidies were a major concern for the Fund as it wants to make the subsidies targeted. They added that according to the IMF, primary deficit was considerably higher compared to the government estimates.

Meanwhile Capital Stake also noted that “ongoing talks with the IMF as well as possibility of circular debt coming to a resolve, brought about a positive trend in the market.”

Sectors lifting the benchmark KSE-100 index higher included the technology and communication sector (166.08 points), oil and gas exploration sector (132.30 points) and banking sector (69.24 points).

Across-the-board buying was witnessed in index-heavy sectors including, automobile assemblers, cement, chemical, commercial banks and especially oil & gas exploration companies and oil & gas marketing companies.

Volume on the all-share index rose to 296.6 million from 176.7 million on Monday. The value of shares traded rose to Rs12.5 billion from Rs8.8 billion recorded in the previous session.

WorldCall Telecom was the volume leader with 44.7 million shares, followed by Pakistan Petroleum with 31.8 million shares and Sui Southern Gas Company with 16.1 million shares.

Shares of 357 companies were traded on Tuesday, of which 185 registered an increase, 144 recorded a fall and 28 remained unchanged.

On the economic front, the rupee fell 0.35%]3 or Re0.98 to close at 276.28 against the US dollar.