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Stocks rebound on World Bank loan approval

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KARACHI:

Pakistan Stock Exchange (PSX) on Monday experienced a significant recovery, driven by the World Bank’s approval of $150 million project financing and completion of final review under the International Monetary Fund’s (IMF) $3 billion standby arrangement (SBA).

In the morning, the market saw a lacklustre start with the KSE-100 index touching the intra-day low of 65,301.73 points. However, investor sentiment turned positive as data revealed a current account surplus of $128 million in February alongside surging global crude prices and the rebound in Pakistani rupee following IMF’s initial approval of a $1.1 billion tranche.

The oil and gas exploration sector led the market’s gains on reports of government efforts to draw investment from friendly countries in Pakistan’s largest hydrocarbon explorer. Banking, fertiliser and power sectors also helped push the index upwards.

Eventually, the bourse reached the intra-day high of 65,656.49 points but closed more than 100 points below the peak.

“Stocks showed a strong recovery as investors weighed the World Bank’s approval of $149.7 million project financing and Pakistan-IMF staff-level agreement in the final review,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Upbeat data showing a $128 million current account surplus in February, higher global crude oil prices and rupee recovery after the IMF’s initial approval of a $1.1 billion tranche played the role of catalysts in bullish close at the PSX.”

Read Stocks succumb to selling pressure

At close, the benchmark KSE-100 index recorded an increase of 373.82 points, or 0.57%, and settled at 65,525.65.

Topline Securities, in its report, said that Monday’s trading session began on a positive note. “The oil and gas exploration sector spearheaded the market’s gains following reports of Pakistan government’s intention to solicit investments from friendly nations in the country’s largest hydrocarbon explorer,” it said.

Consequently, Oil and Gas Development Company (+2.90%) and Pakistan Petroleum (+1.66%) closed in the green. Overall, banking, exploration and production (E&P), fertiliser and power sectors contributed significantly to the index’s rise.

Among these sectors, Hub Power, Oil and Gas Development Company, National Bank of Pakistan, Engro Fertilisers and Pakistan Petroleum collectively added 269 points.

Conversely, Systems Limited, Lucky Cement, Habib Bank and Service Industries faced selling pressure, resulting in a combined loss of 72 points, Topline added.

Arif Habib Limited (AHL), in its review, wrote that the PSX “moved higher within the 64,000-66,000 range at the start of the week.”

Hub Power (+2.22%), Oil and Gas Development Company (+2.9%) and National Bank of Pakistan (+7.5%) were the biggest contributors to the index’s gains, AHL said, adding that Systems Limited (-1.02%) declared CY23 earnings per share of Rs29.8, up 31% year-on-year, along with dividend of Rs6 per share, which saw the stock hit the day’s low at Rs385 before recovering to close at Rs391.89.

JS Global analyst Mubashir Anis Naviwala observed that the PSX remained positive and closed at 65,526 with gains of 374 points.

“Going forward, we recommend investors to view any downside as an opportunity to invest in banking, E&P and technology sectors,” the analyst added.

Overall trading volumes increased to 261.2 million shares against Friday’s tally of 208.4 million. The value of shares traded during the day was Rs8.9 billion.

Shares of 334 companies were traded. Of these, 145 stocks closed higher, 169 dropped and 20 remained unchanged. Pakistan Telecommunication Company was the volume leader with trading in 27.2 million shares, gaining Rs1.05 to close at Rs15.70. It was followed by Hascol Petroleum with 21.4 million shares, gaining Rs0.54 to close at Rs8.08 and K-Electric with 20.9 million shares, gaining Rs0.19 to close at Rs4.57.

Foreign investors were net buyers of shares worth Rs862.5 million, according to the NCCPL.

Published in The Express Tribune, March 26th, 2024.

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