Improved economy propels PSX to new highs

KARACHI:

Pakistan Stock Exchange (PSX) reached unprecedented highs on Tuesday and hit the peak close to 63,000 points, driven by a 9% month-on-month rise in oil sales and anticipation surrounding the upcoming release of the International Monetary Fund (IMF) loan tranche.

As trading commenced in the morning, the KSE-100 index recorded a modest decline. The trend persisted for most of the day with the market touching its intra-day low at 62,215.18 points after midday.

Later, it made a remarkable recovery following reports of government’s plans to eliminate the gas price disparity for exporters. Moreover, the index also got support from rupee stability and improvements in Pakistan’s trade deficit, remittances and exports.

Resultantly, the index surged to the intra-day high at 63,036.51 points by breaking the 63k barrier, which had seemed far-fetched at the start of the day.

Key contributors to the momentum were stocks of oil marketing companies (OMCs), exploration and production (E&P) firms and the banking sector.

At close, the benchmark KSE-100 index recorded gains of 462.97 points, or 0.74%, and settled at 62,956.03.

“Stocks closed at a new all-time high amid upbeat data on oil sales that rose 9% month-on-month in November 2023 and speculation ahead of the release of next IMF tranche,” said Arif Habib Corp MD Ahsan Mehanti.

“Government’s plans to end gas price disparity for the export sector and rupee stability due to strong economic indicators like trade deficit, remittances and exports played the role of catalysts in record close at the PSX.”

Topline Securities, in its report, wrote that Pakistan equities sustained their bullish trend. “The upward momentum signifies a boost in investor confidence, driven by expectations of an improved economic landscape,” it said.

Stocks of OMCs, E&P and bank sectors made a positive contribution with Pakistan Petroleum, Oil and Gas Development Co, Meezan Bank, Pakistan Oilfields and Attock Refinery adding 399 points to the index.

Conversely, some stocks such as Millat Tractors, Hub Power and Lucky Cement experienced profit-taking, resulting in a combined loss of 129 points, Topline added.

Arif Habib Limited (AHL) commented that there were “more gains for Pakistan as it saw trade above 63k before settling just below.”

Read: PSX eyes 32% growth by Dec 2024

Key index movers were Pakistan Petroleum (+7.32%), Oil and Gas Development Co (+5.4%) and Meezan Bank (+3.07%), it said, adding that negative contribution came mainly from Millat Tractors (-3.8%), Hub Power (-0.88%) and Lucky Cement (-1.34%).

JS Global analyst Mubashir Anis Naviwala said that the KSE-100 experienced a surge as bulls drove it to the intra-day peak of 63,036 points.

“Going forward, we expect the bullish trend to continue and recommend investors to view any downside as an opportunity to buy stocks in banking, cement and E&P sectors,” the analyst added.

Overall trading volumes increased to 765.4 million shares compared with Monday’s tally of 734.3 million. The value of shares traded during the day was Rs30.9 billion.

Shares of 383 companies were traded. Of these, 188 stocks closed higher, 177 dropped and 18 remained unchanged.

Cnergyico PK was the volume leader with trading in 82.3 million shares, gaining Rs0.24 to close at Rs4.85. It was followed by Pakistan Refinery with 53.7 million shares, gaining Rs1.34 to close at Rs26.98 and Fauji Foods with 37.7 million shares, gaining Rs0.36 to close at Rs9.50.

Foreign investors were net buyers of shares worth Rs262.85 million, according to the NCCPL.

Published in The Express Tribune, December 6^th, 2023.

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