Pakistan stocks rally over IMF hope, KSE-100 up nearly 1,400 points

The Pakistan Stock Exchange (PSX) witnessed a massive bullish run with the KSE-100 surging nearly 1,400 points or 3.4% on Monday. The surge in share prices came due to anticipation that passage of the new budget measures would finally pave way for revival of the International Monetary Fund (IMF) programme in addition to the import restrictions having finally been lifted after several months.

At close, the benchmark index settled at 41,437.10, an increase of 1371.78 points or 3.42%.

Third session in red: KSE-100 Index falls 0.22% in mixed session

Across-the-board buying was witnessed among index-heavy sectors including oil and gas, automobile assemblers, cement, chemical, commercial banks trading in the green.

Experts said the bullish run, which came after a string of negative sessions, was on account of key developments that ignited hopes of resumption of the IMF programme.

“The change of sentiment came on the back of a series of developments in recent days, which indicate that the IMF deal is moving in a positive direction,” Sana Tawfik, an analyst at the Arif Habib Limited (AHL), told Business Recorder.

During the week, a number of major developments occurred including the meetup of Prime Minister Shehbaz Sharif with Kristalina Georgieva, Managing Director of the IMF at the sidelines of the Paris Summit.

Following this development, the State Bank of Pakistan (SBP) on Friday announced the withdrawal of all restrictions on imports to facilitate the industrial sector.

Moreover, the government announced to impose Rs215 billion in additional taxes, said Finance Minister Ishaq Dar on Saturday, as the government eyed resuming the IMF Programme.

“Market expects good news in the coming days,” Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited (IISL), told Business Recorder.

“If a staff-level agreement is inked, then Pakistan would come closer to completing the review. Meanwhile, relaxation could be given by the international lender on the funding gap as well,” he said.

The expert said the “year-end phenomena” was also playing its part. “The market would remain positive till the fiscal year-end, unless negative news dents the sentiment,” he added.

Similar views were expressed by Waqas Kukaswadia, Deputy Head of Research at JS Global.

“The surge in the KSE-100 index can be attributed to substantial fiscal revisions amounting to Rs300 billion made in the recently passed Finance Bill. These revisions have generated optimism regarding the IMF programme,” he said.

On the economic front, Pakistani rupee recorded a minor increase against the US dollar, appreciating Re0.03 or 0.01% in the inter-bank market on Monday to settle at 286.71.

Volume on the all-share index spiked to 226.8 million from 136.9 million on Friday, while the value of shares traded also jumped to Rs7 billion from Rs3.4 billion recorded in the previous session.

WorldCall Telecom was the volume leader with 26.2 million shares followed by Fauji Fertiliser Bin Qasim Plant with 13.1 million shares and Sui Northern Gas Company Limited with 12.5 million shares.

Shares of 327 companies were traded on Monday, of which 269 registered an increase, 43 recorded a fall and 15 remained unchanged.