PSX gets off to flying start in 2024

Benchmark KSE-100 index shoots up 2,210.74 points, settles at 64,661.78

KARACHI:

On the first day of the new calendar year, Pakistan Stock Exchange (PSX) enjoyed a remarkable rally of over 2,200 points, propelled by investor enthusiasm about the Special Investment Facilitation Council (SIFC) initiatives, coupled with anticipation of economic reforms by the incoming government.

Despite initiating trading at the intra-day low of 62,672.96 points, the KSE-100 index continuously moved upwards due to the prevailing positive sentiment, which set a bullish tone. The impending release of a $700 million loan tranche by the International Monetary Fund (IMF), surge in the central bank’s foreign currency reserves and government’s commitment to resolving the circular debt crisis aided the market’s momentum.

Additionally, the achievement of a current account surplus in November further contributed to the bull-run.

Supported by the growing optimism, the index gradually ascended throughout the day until it reached the intra-day high at 64,718.88 points about an hour before close.

Energy-sector stocks were in the limelight, driven by reports of release of funds to the independent power producers (IPPs). Simultaneously, the banking sector saw increased investor interest over expectations of better-than-expected earnings and attractive dividends in the upcoming results season. The market closed near its peak with hefty gains.

“Bullish activity continued amid speculation about SIFC-monitored initiatives and implementation of economic reforms by the new government,” said Arif Habib Corp MD Ahsan Mehanti.

“Imminent release of IMF tranche, surging forex reserves, government’s resolve to end circular debt and current account surplus in November played the role of catalysts in bullish close at the PSX.”

At close, the benchmark KSE-100 index recorded a surge of 2,210.74 points, or 3.54%, and settled at 64,661.78.

Topline Securities, in its report, stated “Pakistan equities commenced CY24 with a bang as the KSE-100 index rallied 2,211 points (up 3.54%) on the first day of the year”.

“The day began on a strong note in the backdrop of news regarding the release of funds to the government and IPPs, which helped energy stocks to remain in the limelight since morning,” it said.

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Oil and Gas Development Company, Pakistan Petroleum, Pakistan State Oil, Sui Northern Gas Pipelines and Sui Southern Gas Company all hit their ‘limit-up’ for the day.

Banking sector stocks joined the party as investors did some cherry-picking in anticipation of better-than-expected earnings with good dividends in the upcoming results season, which would start in the next couple of weeks, Topline added.

Arif Habib Limited (AHL), in its review, wrote that “with nearly all global markets closed for the New Year, the KSE-100 gained a ‘table-topping’ 3.66% to kick off 2024 in an aggressive fashion with advancers-to-decliners ratio of 91:4.”

Pakistan Petroleum (+7.5%), Oil and Gas Development Company (+7.5%) and Systems Limited (+5.71%) contributed the most to the index’s advance, it said.

JS Global analyst Muhammad Shuja Qureshi said that the KSE-100 index got off to a flying start on the first day of the new year, gaining 2,211 points to close at 64,662.

“Investors are advised to accumulate high dividend-yielding stocks on dips,” the analyst added.

Overall trading volumes increased to 625.1 million shares against Friday’s tally of 590.6 million. The value of shares traded during the day was Rs18.5 billion.

Shares of 380 companies were traded. Of these, 328 stocks closed higher, 37 dropped and 15 remained unchanged.

K-Electric was the volume leader with trading in 76.4 million shares, gaining Rs0.18 to close at Rs5.44. It was followed by WorldCall Telecom with 61.5 million shares, gaining Rs0.16 to close at Rs1.57 and Cnergyico PK with 54.9 million shares, gaining Rs0.37 to close at Rs5.29.

Foreign investors were net sellers of shares worth Rs141.1 million, according to the NCCPL.

Published in The Express Tribune, January 2^nd, 2024.

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