KARACHI: Hours after the International Monetary Fund’s executive board accorded the much-awaited approval to the crucial bailout package, the stock market on Thursday faltered, ending the much-hyped euphoria as bears returned with a bang and threw bulls out of the trading arena amid unabated foreign selling.

While acknowledging progress in multiple areas, the IMF board, in a press statement released following the approval of a 37-month $7 billion new Extended Fund Facility and the first tranche of about $1.1bn by Sept 30, also noted that Pakistan’s vulnerabilities and structural challenges remain formidable.

“A difficult business environment, weak governance, and an outsized role of the state hinder investment, which remains very low compared to peers, while the tax base remains too narrow to ensure tax fairness, fiscal sustainability and meet Pakistan’s large social and development spending needs,” the fund said in its statement.

Ahsan Mehanti of Arif Habib Corporation said stocks closed lower on institutional profit-taking amid uncertainty over the outcome of the government’s tax reforms to unlock a $7bn IMF bailout and challenges over ongoing political and institutional tensions.

He said the weak rupee, a slump in global crude oil prices, and concerns about the surging power sector circular debt contributed to the bearish close.

Topline Securities said key market movers included heavyweights such as Service Industries, Bank Alfalah, Pakistan Oilfield, Bank Al-Habib and National Bank of Pakistan, collectively adding 118 points to the index. Conversely, Hub Power, Fauji Fertiliser, United Bank, Interloop Ltd, and Mari Petroleum dragged the index down by 426 points.

Meanwhile, BF Biosciences Ltd received an exceptional response for its IPO’s book-building portion, achieving an oversubscription of 3.4 times at Rs4.7bn against the target size of Rs1.37bn. However, it raised Rs1.93bn in total, making it the first pharma sector IPO in 2024.

The KSE-100 index fluctuated sharply, reaching an intraday high of 657 points and plunging to a low of 695 points. However, it settled at 81,657.97 points after losing 589.95 points or 0.72pc day-on-day.

Published in Dawn, September 27th, 2024