The Pakistan Stock Exchange (PSX) showed signs of recovery on Tuesday, driven by Morgan Stanley Capital International’s (MSCI) addition of 19 companies to its MSCI frontier small-cap index in the Quarterly Index Review.
Following lacklustre prior sessions, the trading day commenced with an intraday low of 59,613.17 points. Pressure on the KSE-100 index persisted due to reports of the International Monetary Fund’s (IMF) disapproval regarding government proposals for power tariff rationalisation and the resolution of the circular debt crisis.
Despite these challenges, the market began its upward trajectory post-midday owing to upbeat news of $2.4 billion remittances surging by 26% year-on-year in January 2024. Additionally, reports suggesting coalition arrangements for the PM slot in forming a new government, and strong earnings in the oil and banking sectors further lifted the market.
Resultantly, the index touched an intraday high of 61,654.65 points right before its close, erasing all prior losses.
“Stocks showed recovery in the post-election rally at PSX after MSCI added 19 companies to its MSCI frontier small-cap index in the Quarterly Index Review,” said Arif Habib Corp MD Ahsan Mehanti.
“Mid-session pressure remained on reports of IMF disapproval on government proposals for power tariff rationalisation and the resolve of circular debt crises.”
“Reports of coalition sharing PM slot forming a new government, upbeat data on $2.4 billion remittances surging by 26% YoY in January 2024, and strong earnings in the oil and banking sector played a catalyst role in a bullish close,” the analyst added.
At close, the benchmark KSE-100 index recorded gains of 161.61 points, or 0.26%, and settled at 61,226.92.
Topline Securities, in its commentary, said that the “market opened on a negative trend where mainly Oil and Gas Development Company and Pakistan Petroleum opened at a lower lock on the back of the news that IMF is not on board with the energy ministry’s tariff rationalisation and circular debt management plan. However, during the second half recovery was witnessed, and both the stocks managed to open their respective lower locks.”
Read PSX jumps over 1,000 points after MSCI adds 15 more Pakistani companies
Similarly, the cement sector witnessed a resurgence, with Pioneer Cement, Maple Leaf Cement Factory, and Fauji Cement registering gains of 3.19%, 3.09%, and 2.98%, respectively, culminating in a positive close, Topline added.
Arif Habib Limited (AHL), in its report, noted that early declines saw the post-election decline extend to -7.14% (59,600) before a recovery to close above 61,000.
“55 stocks rose while 33 fell with Mari Petroleum Company (+7.5%), Engro Fertilizers (+3.44%), and United Bank (+2.56%) contributing the most to index gains,” it said, adding that Oil and Gas Development Company (-7.47%), Pakistan Petroleum (-6.25%), and Pakistan State Oil (-4.01%) were the biggest downside contributors.
JS Global analyst Mohammed Waqar Iqbal stated that the KSE-100 index commenced the session in the negative zone amid political uncertainty; nevertheless, it rebounded by mid-day.
“Going forward, a cautious approach is recommended,” the analyst added.
Overall trading volumes increased to 435.55 million shares against Monday’s tally of 349.97 million. The value of shares traded during the day was Rs15.97 billion.
Shares of 355 companies were traded. Of these, 188 stocks closed higher, 139 dropped, and 28 remained unchanged.
K-Electric was the volume leader with trading in 65.8 million shares, losing Rs0.06 to close at Rs4.15. It was followed by WorldCall Telecom with 30.1 million shares, gaining Rs0.02 to close at Rs1.23 and Pakistan Refinery with 28.6 million shares, losing Rs0.34 to close at Rs25.63.
Foreign investors were net buyers of shares worth Rs48.2 million, according to the National Clearing Company of Pakistan Limited (NCCPL).
Published in The Express Tribune, February 14th, 2024.
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