PIA sell-off, IMF loan send PSX to new high

KSE-100 index surges 641.51 points, settles at 66,547.79

KARACHI:

Pakistan Stock Exchange (PSX) on Wednesday soared to a record high as it crossed the 66,500 milestone over progress in the privatisation process for state-owned Pakistan International Airlines (PIA) and optimism about a new, larger International Monetary Fund (IMF) loan programme.

As trading commenced in the morning, the bourse continued its upward march with investors pushing the KSE-100 index above the resistance level of 66,000, which the market had failed to breach in the past many days.

The index got a boost from the PIA board of directors’ approval of the government’s plan to privatise the national flag carrier, ahead of securing the new IMF loan programme.

Prime Minister Shehbaz Sharif’s statement that an agreement on the second phase of China-Pakistan Economic Corridor (CPEC) was expected to be signed with Beijing soon rejuvenated investor confidence. Major contribution to the bullish momentum came from banking and fertiliser sectors.

The upward momentum was further aided by the rupee’s continuous stability, which took the KSE-100 to the intra-day high of 66,607.87. The index after shedding some points in the final hour closed above the 66,500 level.

“Stocks closed at a record high as government deliberated the PIA privatisation process and global investors’ interest in the ailing SOE (state-owned enterprise),” said Ahsan Mehanti, MD of Arif Habib Corp.

Read PSX extends gains, nears 66,000 mark

“Rupee stability, PM’s commitment to the second phase of CPEC and foreign fund inflows played the role of catalysts in bullish close at the PSX.” At close, the benchmark KSE-100 index recorded a surge of 641.51 points, or 0.97%, and settled at 66,547.79.

Topline Securities’ Deputy Head of Sales Ali Najib reported that finally the index broke the 66,000 barrier, which could be attributed to “positive vibes from the IMF, rejuvenated foreign interest at historically low valuations and progress on SOE privatisation”.

Investors chose to further strengthen their equity positions by buying blue-chip stocks across the board, he said. Resultantly, power, banking and fertiliser sectors contributed positively to the index as Hub Power, Meezan Bank, United Bank, MCB Bank and Engro Corporation added a total of 319 points.

On the flip side, Pakistan Petroleum, the National Bank of Pakistan and Millat Tractors saw some profit-taking as they cumulatively lost 67 points, he added.

Arif Habib Limited (AHL), in its review, wrote that the 66,000 resistance level was finally breached and it should now support the ascent to new all-time highs.

According to Finance Minister Muhammad Aurangzeb, Pakistan will be looking to conclude an IMF agreement for a new loan programme by the end of June or early July, it said.

AHL added that investors would be focusing on the FTSE equity country classification review after the close of US markets on Thursday, where Pakistan was on the watch list for potential demotion from secondary emerging to frontier market status.

JS Global analyst Mubashir Anis Naviwala observed that the bourse made a significant breakthrough as the KSE-100 index surpassed the resistance level of 66,200.

Considerable investor interest was seen in banking and fertiliser sectors, he said. “Looking ahead, we suggest investors to consider a buy-on-dips strategy, particularly focusing on banking, E&P and technology sectors,” the analyst added.

Overall trading volumes increased to 354.6 million shares against Tuesday’s tally of 303.7 million. The value of shares traded during the day was Rs11.9 billion.

Shares of 346 companies were traded. Of these, 179 stocks closed higher, 152 dropped and 15 remained unchanged.

Lotte Chemical was the volume leader with trading in 42.8 million shares, gaining Rs0.55 to close at Rs19.53. It was followed by Telecard Limited with 29.2 million shares, gaining Rs0.75 to close at Rs9.24 and PTCL with 24.7 million shares, gaining Rs1.21 to close at Rs17.31. Foreign investors were net buyers of shares worth Rs94.3 million, according to the NCCPL.

Published in The Express Tribune, March 28^th, 2024.

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