Stocks soar to record high on SOEs sell-off

KSE-100 index advances 594.34 points, settles at 67,142.12

KARACHI:

In another record-breaking rally, the Pakistan Stock Exchange (PSX) on Thursday rose nearly 600 points and shot past the 67,000-point barrier to a new record high on the back of major positive developments.

The key triggers were the classification of Pakistan as a secondary emerging market in the FTSE Global Equity Indices and the fast-tracking of privatisation process for state-owned Pakistan International Airlines (PIA).

Earlier, trading began with investor optimism amid robust activity. Bulls dominated proceedings throughout the day as they cheered progress in the privatisation of PIA and other state-owned entities (SOEs).

Moreover, the FTSE classification was expected to result in increased foreign inflows due to a stable government, which gave boost to investor confidence. Resultantly, the KSE-100 index touched the intra-day high of 67,246.02 points. Market optimism was further fuelled by reform agenda and the potential new International Monetary Fund (IMF) programme. Power, banking and fertiliser sectors primarily contributed to the market’s strength.

The index, after shedding some points in the final hour, closed above the 67,000 mark.

“Stocks closed at an all-time high after FTSE maintained Pakistan equities’ secondary emerging market status, which is likely to lead to inflows of passive stock funds amid a stable government,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Government deliberations on privatising the ailing SOEs amid approval of Rs268 billion worth of debt restructuring for PIA and rupee stability after the Pakistan-IMF staff-level agreement for the release of $1.1 billion tranche played the role of catalysts in bullish close at the PSX.”

At close, the benchmark KSE-100 index recorded a surge of 594.34 points, or 0.89%, and settled at 67,142.12. Topline Securities, in its report, said that the KSE-100 index continued its upward trajectory.

“Optimism was fuelled by the reform agenda, alongside anticipation of a forthcoming IMF programme, fostering a favourable market outlook,” it said.

“SIFC (Special Investment Facilitation Council) remains steadfast in its commitment to reforms, notably through the privatisation of PIA and other state-owned entities. To drive this agenda forward, the SIFC is convening a three-day meeting with the newly constituted executive committee, under the leadership of PM Shehbaz.”

Investors strategically augmented their equity portfolios by acquiring blue-chip stocks across diverse sectors. Notably, power, banking and fertiliser sectors positively influenced the index, with Bank AL Habib, Engro Corporation, MCB Bank, Pakistan Petroleum and Lucky Cement collectively contributing 208 points, Topline added.

Arif Habib Limited (AHL), in its review, highlighted that the KSE-100 index saw “new all-time highs with gains through 67,000”.

FTSE retained Pakistan on the watch list as part of its March 2024 interim update, it said, adding that Pakistan would next be assessed against the minimum investible market capitalisation and securities’ exit level as of June 28, 2024.

JS Global analyst Mubashir Anis Naviwala observed that the KSE-100 breached an all-time high as significant interest was seen in sectors like banking, cement and fertiliser. “Looking ahead, we advise investors to adopt a buy-on-dips approach, especially focusing on banking, E&P and fertiliser sectors,” the analyst added.

Overall trading volumes increased to 421.1 million shares against Wednesday’s tally of 354.6 million. The value of shares traded during the day was Rs16.2 billion.

Shares of 352 companies were traded. Of these, 212 stocks closed higher, 111 dropped and 29 remained unchanged.

PTCL was the volume leader with trading in 55.7 million shares, gaining Rs1.11 to close at Rs18.42. It was followed by Lotte Chemical with 27.2 million shares, gaining Rs0.03 to close at Rs19.56 and Telecard Limited with 25.5 million shares, gaining Rs0.05 to close at Rs9.29. Foreign investors were net sellers of shares worth Rs259.3 million, according to the NCCPL.

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

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