Daily Times

Investors on the Pakistan Stock Exchange (PSE) were buoyed by the anticipated resumption of the International Monetary Fund’s (IMF) $6 billion loan programme and strong company results during the previous week.

The stock market rose by 832 points, or 1.85 percent, this week due to strong investor interest, which was fueled by a slew of favourable announcements.

An Arif Habib Limited article stated that “Positive momentum was mainly driven by investors’ anticipation of approval of $1 billion disbursements by the IMF executive board under the Extended Fund Facility (EFF).”

The stock market in Pakistan has continued to rise as a result of an increase in global stock markets, which has stemmed from an improvement in global economic indices.

This week’s gains in the KSE-100 index were mostly due to the assumption that the International Monetary Fund (IMF) would approve Pakistan’s resumption of its loan programme, which has been on hold since the middle of 2021.

The futures spread declined by 107bps to 3.8 percent on the last day of outgoing week.

Trading activities on the futures counter remained very thin as average daily volumes decreased by 53.3 percent as compared to previous week’s average of shares.

News that Pakistan would ask China for a $3 billion loan during the prime minister’s visit also helped to promote an upward trend in the market, participants expressed optimism that the loan will help to stabilise the country’s currency and foreign exchange reserves.

Reports that Pakistan had raised $1 billion through the issuance of Sukuk fueled the purchasing frenzy.

However, despite the IMF’s approval of resuming its lending programme, the stock market turned gloomy on Thursday due to a dramatic increase in inflation rates.

Investors’ confidence was dented when the Consumer Price Index (CPI) for January came in at 13pc, raising concerns about an increase in inflationary pressures.

As investor participation remained low and activity was modest in the penultimate session of the week, the KSE-100 index edged up slightly.

The upswing in the stock market was bolstered this week by the rupee’s appreciation against the dollar.

There are projected to be a number of good developments in the textile, information technology, and engineering industries as a result of Prime Minister Li Keqiang’s visit to Beijing,” claimed the AHL report.

At 289 million shares and $55 million, the average daily traded volume and value increased by 54pc and 43pc, respectively, during the period under consideration.

Banking (189 points), fertiliser (132 points), oil and gas exploration (127 points), oil and gas marketing (92 points), and textile composite all made significant contributions (69 points).

Technology and communications (26 points), power generation and distribution (5 points), and vehicle assemblers (three points) were the industries that had the most negative impact (4 points).

HBL (60 points), Fauji Fertilizer Company (52 points), Bank AL Habib (51 points), Oil and Gas Development Company (51 points), and PSO (51 points) were the stock-wise positive contributors (50 points).

TRG Pakistan contributed 18 points, followed by Systems Limited (17 points) and Hubco (16 points) (12 points).

The week’s net selling was $4.42 million, compared to the prior week’s net selling of $4 million.

In the technological sector, sales reached $2 million, while at commercial banks, they reached $1.7 million. Other organizations ($3.9 million), followed by mutual funds ($3 million), reported domestic purchases.

There was no change in the price of petroleum products, the arrival of Prime Minister Imran Khan in Beijing, and a clarification from the Economic Affairs Division regarding a report that Pakistan was seeking $5 billion in new loans, the IMF predicting 4pc real GDP growth, and the Drug Regulatory Authority agreeing to raise Paracetamol prices.