Strong economic cues propel PSX to new peak

KARACHI:

Pakistan Stock Exchange (PSX) touched a new historic high on Wednesday as it rose past the 58,000-point mark on the back of continuous rupee recovery and a marked improvement in the current account balance that reached almost breakeven.

Other positive economic indicators that contributed to the milestone included the rise in home remittances and a notable surge in exports coupled with the expected receipt of next loan tranche from the International Monetary Fund (IMF) following its executive board meeting on December 7.

In the morning, trading began at the intra-day low of 57,418.50 points, but in a swift turnaround the KSE-100 index moved upwards, fueled by the improving macroeconomic indicators.

Further support that lifted the index came from the surging Pakistan’s dollar bond prices, driven by the completion of IMF’s first quarterly review under a $3 billion standby arrangement and government’s deliberations to address the circular debt crisis.

Resultantly, the index reached its intra-day high at 58,405.92 points well before close. Major positive contributors were exploration and production (E&P), bank and cement sectors. Ultimately, the index ended trading near the day’s high.

“Stocks closed at a new all-time high amid ongoing rupee recovery, upbeat economic indicators pertaining to the current account deficit and home remittances, surge in exports and likely receipt of IMF loan tranche following executive board meeting on December 7,” said Arif Habib Corp MD Ahsan Mehanti.

“Surging dollar bond prices following completion of the IMF’s first quarterly review and deliberations in government circles to resolve the gas-sector circular debt crisis also played the role of catalysts in record close of the market.” At close, the benchmark KSE-100 index registered gains of 827.17 points, or 1.44%, and settled at 58,198.76.

Read: PSX hits another record, crosses 58,000 barrier

Topline Securities, in its report, noted that Pakistan’s stock market saw a notable upswing, reaching a new pinnacle with an increase of 827 points. “This positive trajectory is influenced by the anticipation of improved economic conditions,” it said.

Sectors like E&P, bank and cement made favourable contributions where Meezan Bank, Bank AL Habib, Lucky Cement, Pakistan State Oil and Pakistan Petroleum added a total of 352 points.

Conversely, Thal Limited, Allied Bank and Dawood Hercules wiped off some gains, resulting in a loss of 28 points, Topline added.

Arif Habib Limited (AHL), in its report, wrote that the KSE-100 index closed above 58k as the bull market set a new record with a 1.4% day-on-day rise.

Meezan Bank (+4.49%), Bank Alfalah (+4.78%) and Lucky Cement (+3.59%) were the largest contributors to the day’s gains while Thal Limited (-3.35%), Allied Bank (-3.5%) and Dawood Hercules (-0.55%) were the biggest drags, AHL noted.

JS Global analyst Mohammed Waqar Iqbal said that the market remained upbeat as the KSE-100 index touched a new high at 58,199.

“Going forward, we recommend investors to view any downtrend as an opportunity to buy stocks in the tech, cement and textile sectors,” the analyst added.

Overall trading volumes decreased to 596.2 million shares compared with Tuesday’s tally of 1.01 billion. The value of shares traded during the day was Rs22.1 billion.

Shares of 389 companies were traded. Of these, 236 stocks closed higher, 136 dropped and 17 remained unchanged.

WorldCall Telecom was the volume leader with trading in 50.3 million shares, losing Rs0.03 to close at Rs1.64. It was followed by Fauji Fertiliser Bin Qasim with 23.3 million shares, gaining Rs0.31 to close at Rs22.94 and Fauji Foods with 20.2 million shares, gaining Rs0.22 to close at Rs8.99.

Foreign investors were net buyers of shares worth Rs868.2 million, according to the NCCPL.

Published in The Express Tribune, November 23^rd, 2023.

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