Stocks spike as SBP keeps rate on hold

KSE-100 index rises 612.09 points, settles at 65,502.60

KARACHI:

Pakistan Stock Exchange on Tuesday extended its gains from the previous day as it surged over 600 points following military strikes on terrorist hideouts and announcement of monetary policy where the State Bank of Pakistan (SBP) kept the policy rate unchanged.

In the morning, trading began on a positive note, but soon the KSE-100 index touched its intra-day low of 64,940.17 points. It swiftly rebounded and breached the 65,000 barrier. The index reached the intra-day high of 65,624.72 points after midday.

The upbeat market sentiment was primarily driven by expectations of an imminent staff-level agreement on the conclusion of last review under the International Monetary Fund (IMF) standby arrangement (SBA), coupled with SBP governor’s assurance of a $2 billion loan rollover in two weeks.

Moreover, plans to seek an additional $4 billion in rollovers boosted investor confidence, which helped lift the index. Notably, banking, fertiliser and exploration and production (E&P) sectors saw increased buying interest.

The market managed to maintain its upward trajectory for most of the day and closed above 65,000 with substantial gains.

“Stocks closed bullish after Pakistan hit TTP (Tehreek-e-Taliban Pakistan) hideouts in response to terror attacks and the SBP maintained the status quo in its key policy rate,” said Ahsan Mehanti, MD of Arif Habib Corp.

Read: Stocks lose ground in range-bound trading

“Speculations about imminent staff-level agreement in the wake of final IMF review talks and the SBP governor’s assurance of a $2 billion loan rollover in two weeks and plans to seek $4 billion in further rollovers played the role catalysts in bullish close at the PSX.”

At close, the benchmark KSE-100 index recorded a surge of 612.09 points, or 0.94%, and settled at 65,502.60.

Topline Securities reported that positivity in the market could be attributed to the SBP deciding to keep the policy rate unchanged at 22%.

“A surge in buying activity swept through the market, with banking, fertiliser and E&P sectors emerging as the day’s primary beneficiaries,” it said.

MCB Bank, Meezan Bank, Habib Metropolitan Bank, Bank AL Habib, Engro Fertilisers, Fauji Fertiliser Company, Pakistan Oilfields and Mari Petroleum cumulatively added 319 points to the index.

Investors’ interest was mainly witnessed in the banking sector where Habib Metropolitan Bank (+4.85%), MCB Bank (+3.09%), Meezan Bank (+2.52%) and United Bank (+0.80%) closed higher than the previous day, Topline added.

Arif Habib Limited (AHL), in its report, commented that a constructive session was witnessed following the guessing game on whether the SBP would cut the rate or not.

Dawood Hercules Corp (+7.26%), MCB Bank (+3.08%) and Meezan Bank (+2.52%) were the biggest contributors to the index’s gains, it said, adding that Pakistan International Airlines and Pakistan Telecommunication Company both gained the maximum.

JS Global analyst Mubashir Anis Naviwala said that bullish momentum persisted as the KSE-100 surged to the intra-day high of 65,625 before concluding the session at 65,503, gaining 612 points.

“Going forward, we anticipate the bullish trend to continue. We advise investors to capitalise on any downtrend as an opportunity to invest in banking, cement and E&P sectors,” the analyst added.

Overall trading volumes increased to 323.3 million shares against Monday’s tally of 211.8 million. The value of shares traded during the day was Rs17.1 billion.

Shares of 341 companies were traded. Of these, 184 stocks closed higher, 140 dropped and 17 remained unchanged.

WorldCall Telecom was the volume leader with trading in 27.8 million shares, gaining Rs0.02 to close at Rs1.38. It was followed by Telecard Limited with 20.8 million shares, gaining Rs0.23 to close at Rs9.23 and The Bank of Punjab with 17.9 million shares, losing Rs0.09 to close at Rs6.14.

Foreign investors were net sellers of shares worth Rs465 million, according to the NCCPL.

Published in The Express Tribune, March 20^th, 2024.

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