Bulls hold firm grip over Moody’s report

KSE-100 index gains 484.35 points, settles at 63,703.45

KARACHI:

Bulls held sway over the Pakistan Stock Exchange (PSX) on Wednesday as bullish momentum returned which helped the KSE-100 index gain nearly 500 points after Moody’s ratings agency maintained a stable outlook on Pakistan’s credit rating.

Earlier, the trading session began with a dip but soon bulls took over on optimism about the rating outlook.

The market got further boost from another development whereby the Bank of America (BofA) upgraded Pakistan’s Eurobonds to “overweight” status in the hope that the international rating agencies would upgrade the country’s credit rating.

Furthermore, continued recovery of the Pakistani rupee that reached a new four-month high at Rs279.12 against the US dollar aided the positive sentiment.

Extensive support came from exploration and production (E&P) and banking sectors as the KSE-100 index touched the intra-day high of 63,929.57 points.

The market, after remaining in the green for most of the session, closed above the 63,700 mark.

“Bullish activity was witnessed as investors weighed the summoning of National Assembly session for setting up a new government and Moody’s hint at rating upgrade on a reduction in government’s external and liquidity risks,” said Arif Habib Corp MD Ahsan Mehanti.

“BofA upgrading Pakistan’s bonds due to easing political uncertainty, government’s efforts to win up to $8 billion in IMF loan quota and rollover of $2 billion worth of Chinese debt played the role of catalysts in bullish close at the PSX.”

At close, the benchmark KSE-100 index recorded gains of 484.35 points, or 0.77%, and settled at 63,703.45.

Topline Securities’ Deputy Head of Sales Ali Najib, in his report, said it was “a good day” at the PSX.

“Pakistan equities’ market initiated business on a positive note and remained bullish almost throughout the session,” he said. “The buying momentum can be attributed to further clarity about the formation of a new government.”

In addition, there was news regarding likely upgrading of Pakistan’s rating if the government’s external and liquidity risks reduced, according to Moody’s.

Read PSX retreats as political noise rises

Owing to such developments, across-the-board buying was witnessed for most of the trading hours. Fertiliser, cement, bank and E&P sectors mainly contributed positively to the index as Fauji Fertiliser Company, Engro Fertilisers, Lucky Cement, MCB Bank and Oil and Gas Development Company added 314 points, he added.

Arif Habib Limited (AHL) remarked that the PSX was still stuck in the 63-64k congestion zone with the high capped at 63,900.

TRG Pakistan (-7.5%) following a loss in Q2 was the biggest downside contributor, it said.

Heading into the last trading session of the month, the KSE-100 was up 2.78% so far and “we have the Morgan Stanley Capital International (MSCI) rebalancing, which is expected to see inflows in Interloop, Sui Northern Gas Pipelines and Bank AL Habib following their inclusion in the main FM (Frontier Market) Standard Index”, AHL added.

JS Global analyst Mohammed Waqar Iqbal said the market displayed a positive trend throughout the day with notable activity in banking and oil exploration sectors.

“Going forward, a cautious approach is recommended and investors are advised to sell on strength,” the analyst added.

Overall trading volumes increased to 461.4 million shares against Tuesday’s tally of 409.96 million. The value of shares traded during the day was Rs16 billion.

Shares of 355 companies were traded. Of these, 180 stocks closed higher, 149 dropped and 26 remained unchanged.

Cnergyico PK was the volume leader with trading in 62.2 million shares, gaining Rs0.34 to close at Rs4.39. It was followed by K-Electric with 45.5 million shares, gaining Rs0.27 to close at Rs4.79 and Hascol Petroleum with 30.5 million shares, gaining Rs0.69 to close at Rs7.98.

Foreign investors were net buyers of shares worth Rs825.5 million, according to the NCCPL.

Published in The Express Tribune, February 29^th, 2024.

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