Optimism over IMF tranche keeps stock market bullish

KARACHI: The three-day week on the stock exchange commenced on a positive note last Wednesday amid optimism over the disbursement of loan tranche from the International Monetary Fund (IMF) in the coming weeks.

Arif Habib Ltd said the materialisation of the $1.18 billion loan tranche will pave the way for further loans and investments from friendly countries and international financial institutions.

Moreover, the rupee strengthened again in the outgoing week against the greenback and appreciated by 8.55 or 3.82 per cent from a week ago to close at 215.49.

In addition, investors’ confidence improved after Pakistan received a letter of intent to the IMF, indicating the disbursement of the tranche for the combined seventh and eighth reviews.

As a result, the benchmark index of the stock market closed at 42,858 points, registering a net gain of 761 points or 1.8pc on a week-on-week basis.

Sector-wise, positive contributions came from banks (224 points), exploration and production (205 points), power (84 points), automobile assembling (55 points) and oil and gas marketing (53 points).

Sectors that contributed negatively were cement (23 points) and tobacco (15 points).

Scrip-wise, positive contributors during the outgoing week were Oil and Gas Development Company Ltd (79 points), Pakistan Petroleum Ltd (69 points), Meezan Bank Ltd (67 points), Pakistan Oilfields Ltd (56 points) and the Hub Power Company Ltd (52 points).

Meanwhile, negative contributions came from Pakistan Services Ltd (63 points), Nestle Pakistan Ltd (17 points), Engro Polymer and Che­micals Ltd (16 points) and Pakistan Tobacco Company Ltd (15 points).

Selling by foreigners continued in the outgoing week and clocked in at $0.9 million versus a net sale of $0.7m in the preceding week. Major selling was witnessed in banking ($1.6m) and cement ($1.3m) sectors.

On the local front, buying was reported by individuals ($5.1m) and “other organisations” ($0.4m).

The average daily volume clocked in at 343m shares, up 31pc week-on-week. The average daily traded value settled at $48m, up 41pc from a week ago.

JS Global told investors in a note to adopt a buy-on-dip strategy going forward with a special focus in the shares belonging to the banking, exploration and production and cement sectors.

Published in Dawn, August 14th, 2022

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