KARACHI: Despite late profit-taking, stocks on Monday hit yet another all-time high amid reports Pakistan was in a strong position to strike a deal with International Monetary Fund (IMF) for a new four-year programme of up to $8 billion by end-July, traders said.
The benchmark KSE-100 Shares Index closed at 73,799 points level, up 714 points or 0.98 percent compared to the previous close.During the intraday trade, the benchmark KSE-100 index shot up to 74,086.54 points.
Topline Securities in a note said good vibes from the IMF sent foreign investors on a value-buying spree, while positive developments on macro front also gave rise to a bullish sentiment. "The blue-chip stocks remained in the limelight throughout the day," the brokerage said.
Oil and gas exploration and the fertiliser sectors led the rally with POL, DAWH, ENGRO, PPL, and MARI adding 307 points to the index, while FFC, PAEL & PIOC, which cumulatively lost 58 points, owing to some profit-taking, dragged it down.
Pakistan is expected to reach an agreement with the IMF for a new four-year programme of up to $8 billion by end-July, said a report by the Citi Bank, which recommends going long on the country’s 2027 international bond.
Pakistan last month completed a short-term $3-billion Stand-By Arrangement but Islamabad has stressed the need for a fresh, longer term programme.
“While longer-term challenges pertain, we see several positive catalysts supporting the Eurobonds,” Nikola Apostolov at Citi wrote in a note to clients.
“First, a larger and longer IMF EFF (Extended Fund Facility) program could be finalised by July – possibly a $7-8 billion 4-year program and secondly and a possible inflow of Saudi investments,” Apostolov said after a team from Citi visited Pakistan and met policymakers, including Finance Minister Muhammad Aurangzeb.
Raza Jafri, CEO, EFG Hermes Pakistan, speaking to Geo.tv said that there is agrowing confidence in the market that the next monetary policy due on June 10 will see an interest rate cut and there is acomfort on the rupee's outlook as well.
"This is resulting in investor interest in hitherto underperforming sectors such as cement, steel, and pharmaceuticals which are driving the next leg of the rally," said the analyst.
Meanwhile, Intermarket SecuritiesDirector Research Muhammad Saad Ali, CFA, said that the marketoptimism was driven by a broadly positive International Monetary Fund (IMF) review report released last Friday.
Ali added that the global lender has commended Pakistan's progress towards achieving greater macro stability.
Last week, stocksrose to a record finish with KSE-100closing above the 73,000 mark for the first time, as investors cheered robust remittance data and a decline in inflation figures.
The PSX gained 427.45 points or 0.59% to close at 73,085.50 points on Friday.
“Stocks closed at an all-time high in the pre-budget rally at the PSX after robust data on $2.81 billion remittances surged by 28% year-on-year in April," said analyst Ahsan Mehanti at Arif Habib.