Stocks rebound in a jittery week

KARACHI: The stock market witnessed a meltdown at the beginning of the outgoing week amid profit-taking by investors because of a substantial reduction in leveraged positions.

Arif Habib Ltd said the bearish momentum proved short-lived as the market rebounded the following day by 1,693 points, marking the third-highest day-on-day increase in its history.

Foreign exchange reserves of the State Bank of Pakistan (SBP) climbed by $853 million to hit $7.8 billion owing to inflows from international creditors. Further­more, the government disbursed Rs131bn and Rs57bn to state-owned power plants and K-Electric Ltd, respectively.

Meanwhile, the Asian Infrastructure Investment Bank approved $250m for the RISE-II development policy framework in Pakistan. In addition, Pakistan and Saudi Arabia agreed upon a bilateral legal framework for Saudi investment. Moreover, the exchange rate strengthened by 0.24 per cent to clock in at Rs281.86.

Hence, the KSE-100 index closed at 62,451 points after gaining 746 points or 1.21pc week-on-week.

Sector-wise, positive contributions came from commercial banking (369 points), cement (224 points), fertiliser (148 points), food and personal care (40 points) and leather and tanneries (39 points). Meanwhile, sectors that contributed negatively were oil and gas exploration (71 points), technology (44 points), automobile assembling (42 points), miscellaneous (38 points) and oil and gas marketing (35 points).

Scrip-wise, positive contributors were Meezan Bank Ltd (143 points), United Bank Ltd (106 points), Engro Fertilisers Ltd (80 points), Lucky Cement Ltd (64 points) and MCB Bank Ltd (60 points).

According to AKD Securities Ltd, the rally in the stock market will likely continue, albeit with episodes of profit-taking. Its stance stems from an optimistic expectation of the International Monetary Fund’s tranche receipt, triggering further bilateral/multilateral flows, as well as increased foreign exchange reserves and reduced uncertainty over general elections.

“Overall, we advise our clients to remain focused on fundamentals, with exposure in high-dividend-yielding stocks to effectively navigate the inflationary environment,” it said.