KSE-100 closes nearly flat on profit-taking

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 closed almost flat in a range-bound session on Friday, as late-session profit-taking erased the gains the index had made in the first half.

In the first-half of trading session, propelled by improved market sentiment on account of IMF approval, the benchmark index hit an intra-day high of 65,356.85 level, an increase of nearly 740 points.

However, profit-taking reigned in the second half of the trading session.

At close, the KSE-100 settled at 64,637.64, slightly up by 20.7 points or 0.03.

On Thursday, the PSX had rebounded with an over 1% gain amid talks of a rate cut in the next Monetary Policy Committee (MPC) meeting expected in January as the KSE-100 settled at 64,617.57, up by 697.72 points or 1.09%.

In a major development, the Executive Board of the IMF completed the first review of Pakistan’s economic reform programme supported by the IMF’s SBA on Thursday. The Board’s decision allows for an immediate disbursement of SDR 528 million (around $700 million), bringing total disbursements under the arrangement to SDR 1.422 billion (about $1.9 billion).

Pakistan’s 9-month SBA was approved by the Executive Board on July 12, 2023, in the amount of SDR 2.250 billion (about $3 billion at the time of approval).

The IMF said that the programme aims to provide Pakistan with a policy anchor for addressing domestic and external balances and a framework for financial support from multilateral and bilateral partners.

Market experts said the IMF approval would pave the way for funding from other multilateral and bilateral institutions.

“We believe that after IMF board approval, more dollar funding for Pakistan is likely from bilateral, multilateral and other sources,” said Topline Securities in a note on Friday.

“This will also facilitate rollovers, support foreign exchange reserves and bring stability to the currency.”

Globally, Asian shares were cautious on Friday as the escalating conflict in the Red Sea region sent oil prices surging, while slightly higher-than-expected US inflation data did not dent investors’ views on early and aggressive rate cuts in the US and Europe.

The rally in rates may have been helped by dovish comments from European Central Bank (ECB) President Christine Lagarde who said rate cuts would occur if the central bank has certainty that inflation had fallen to the 2% level.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1%, although Japan’s Nikkei gained 1.2% to another 34-year high, boosted by a weak yen.

Meanwhile, the Pakistani rupee continued its positive trajectory against the US dollar for the eighth successive session, appreciating 0.3% in the inter-bank market on Friday. As per the State Bank of Pakistan, the local unit settled at 280.36 after an increase of Re0.75 against the greenback.

Volume on the all-share index increased to 643.3 million from 586.5 million a session before.

The value of shares increased to Rs20 billion from Rs17 billion in the previous session.

K-Electric Ltd. remained the volume leader with 142.5 million shares, followed by Pak Int.Bulk with 78 million shares and WorldCall Telecom with 27 million shares.

Shares of 365 companies were traded on Friday, of which 137 registered an increase, 261 recorded a fall, while 12 remained unchanged.