Stocks surge 729 points on renewed IMF loan hopes

• KSE-100 index was at 39,914.90 points at 12:13pm. 
• Market performing well after PM's IMF programme statement.
• "International lender has said it stands with Pakistan," says PM.

KARACHI: Stocks surged on Wednesday amid optimism the International Monetary Fund’s (IMF) stalled loan programme would soon be on track as the government had finally put its shoulder to the wheel to get it going as the economy verges on a collapse.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index gained a whopping 729.25 points or 1.87% to close at 39,784.90 points.

Arif Habib Limited (AHL) in a report said another bullish session was taped today at the PSX as the market resumed with the same optimistic outlook as the previous closing. 

"The index opened in the green zone, with the bulls taking charge throughout the trading session, gaining 889.97 points during intraday trade,” the brokerage said.

The AHL report attributed this rally to the government’s resolve to take all-out measures to revive the IMF programme as reportedly the Economic Coordination Committee (ECC) in its next meeting was set to raise gas tariffs, assisting in the resolution of the gas circular debt in accordance with IMF requirements.

Volumes remained elevated across the board, with the cyclical sectors dominating the volume board, the report said.

Sectors contributing to the performance included banks (+290.6pts), fertiliser (+106.pts), exploration and production (+98.8 points), cement (+49.9 points), and technology & communication (+32.0 points).

Volumes increased from 179.8 million shares to 269.5 million shares, up 49.9%, while the average traded value also increased by 65.7% to $45.8 million as against $27.6 million.

Stocks that contributed significantly to the volumes are WorldCall Telecom, TPL Properties Limited, Pakistan Petroleum Limited, Sui Northern Gas Pipelines, and TRG Pakistan.

Topline Securities attributed the bullish sentiment to PM’s stance that the government would try to meet all the pre-requisite conditions to bring IMF to the table for the completion of 9th review. 

"Investors opted to hunt values across the board, especially in selected stocks of fertiliser, banks, and technology. That is why stocks from these sectors contributed positively to the index," the brokerage said.

Engro Corporation, Habib Bank Limited, United Bank Limited, MCB Bank, and TRG Pakistan added 350 points, cumulatively, to the index. On the flipside, System Limited, Pakistan Services Limited, and Engro Fertiliser Limited together lost 26 points.

 Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq said the market was up on hopes of the IMF deal and resolution of gas circular debt,".

Capital market expert Saad Ali said that the PSX was performing well due to the optimism around IMF after Prime Minister Shehbaz Sharif's statement that the government is "willing to do anything" to resume the programme.

A day earlier, PM Shehbaz said that the government told the Fund that it "wants to complete the programme" amid the country's urgent need to generate $10 billion in foreign loans for the remainder of the current fiscal year to prevent default.

“In a clear message, the international lender has said it stands with Pakistan,” the prime minister quoted the IMF as saying.

He added that the government told the IMF that it wanted to conclude the terms through negotiations without any delay so that Pakistan could move ahead.