KSE-100 retreats to end marginally positive after early-morning gains

Profit-booking erased intra-day gains at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 Index settled with a minor 0.24% increase amid reports that the International Monetary Fund (IMF) programme could still be delayed.

At close on Monday, the KSE-100 Index settled at the 41,434.33 level, an increase of 97.33 points or 0.24%. It had earlier hit an intra-day high of 41,797.71.

Last week on Friday, the benchmark KSE-100 Index had closed over 600 points up, with investors hoping that an action plan to appease the International Monetary Fund (IMF) was now complete.

On Monday, across-the-board buying was witnessed among index-heavy sectors including, automobile assemblers, cement, chemical, commercial banks and oil and gas sector before the descent began.

KSE-100 index closes 600 points up amid hope of IMF programme revival

Experts attributed the early-morning positive sentiment to expectation over revival of the stalled IMF Extended Fund Facility (EFF) programme, and reports of inflows from friendly countries.

“Realization of inflows from the Industrial and Commercial Bank of China (ICBC) and expectation of further funds from the Chinese multilateral provided respite to the marke,” a market analyst told Business Recorder.

The market expert said that the IMF board meeting is expected to be held in April, and the disbursement of funds to Pakistan may take further time. “However reaching a staff-level agreement with the international lender would bring in much-needed stability into the market,” they said.

The analyst also said that the country’s exports and remittance inflows are not expected to see much growth in the coming weeks due to global economic conditions. “However, the upcoming Eid season may support remittance inflows”.

Addressing economic concerns, Finance Minister Ishaq Dar on Friday had said China has renewed a facility under which Pakistan expected an additional inflow of $500 million in the next few days and another $500 million later this month.

“Pakistan has made payments of around $2 billion to China Development Bank and ICBC (Industrial and Commercial Bank of China) and $3.5 billion have been given to banks in other countries,” he said.

Later on Friday, Pakistan’s central bank received $500 million from the ICBC, the first of three disbursements that were approved for rollover, informed Dar.

Pakistan recently also received an inflow of $700 million from the China Development Bank, a loan that helped increase the central bank-held foreign exchange reserves to a little over $3.8 billion. The level is still at less than one month of import cover.

A mid-day report, however, that the IMF wants Pakistan to give an assurance that its balance of payments deficit is fully financed for the remaining period of the programme eroded positivity from the market.

Volume on the all-share index rose to 221.5 million from 194.8 million on Friday. The value of shares traded decreased to Rs7.3 billion from Rs7.8 billion recorded in the previous session.

WorldCall Telecom was the volume leader with 42.07 million shares followed by Telecard Limited with 18.07 million shares and TPL Properties with 10.64 million shares.

Shares of 334 companies were traded on Monday, of which 206 registered an increase, 111 recorded a fall and 17 remained unchanged.