Stocks climb to new record above 68k

Benchmark KSE-100 index soars 660.75 points, settles at 68,416.78

KARACHI:

Pakistan Stock Exchange (PSX) on Thursday continued its record-setting rally as it surged above 68,000 points over investors’ growing interest in pharmaceutical stocks following court’s verdict in favour of the industry, and a robust corporate earnings outlook.

While continuing the previous day’s bullish momentum, the trading session began with a spike. However, the KSE-100 index dipped to its intra-day low of 67,912.35 points after an hour. It once again picked up steam and consistently marched north until the end of trading.

The lifting of a stay order by the court against the deregulation of maximum retail prices for the pharmaceutical industry mainly fuelled the bullish activity at the bourse.

Furthermore, investor sentiment got a lift from Saudi Arabia’s intention to invest up to $1 billion in the Reko Diq copper and gold project.

The index remained in the green for most part of the day and closed above the 68,000 mark at a new all-time high with gains of over 650 points.

“Stocks closed at an all-time high on a strong earnings outlook,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Expected policy easing by the State Bank and a potential $1 billion Saudi Reko Diq deal next month along with OGDC and PPL share offerings and surging global crude oil prices played the role of catalysts in bullish close in the earnings season at the PSX.” At close, the benchmark KSE-100 index recorded an increase of 660.75 points, or 0.98%, and settled at 68,416.78.

Alpha Beta Core CEO Khurram Schehzad, in a statement, said “investor confidence is based on the resumption of privatisation, prioritising entities with losses to improve the government’s fiscal position. Expectations that the last IMF tranche will be received in the coming week also support the external situation.”

Topline Securities, in its report, said that a second consecutive positive session was observed at the stock exchange.

Investor interest was noted in the pharmaceutical sector on news that the Lahore High Court on April 2, 2024 had disposed of a case in favour of the pharmaceutical industry and the stay order against the deregulation of maximum retail prices of drugs was vacated, it said.

“Multiple companies in the sector gained ground to close at their respective upper limits.”

Major positive contribution to the index came from Meezan Bank, Oil and Gas Development Company (OGDC), Dawood Hercules Corporation, Systems Limited and Pakistan Petroleum Limited (PPL), as they cumulatively contributed 303 points.

Pak Elektron declared its end-December results where it posted 4QCY23 earnings per share (EPS) of Rs0.44 and CY23 EPS of Rs1.55, in line with market expectations, Topline added.

In its review, Arif Habib Limited (AHL) stated that the stock market gained 2% week-on-week, surpassing 68,000 during a shortened trading week.

“Pakistan now heads into a holiday season with Friday off and only Monday and Tuesday as working days next week,” it said. “The current draw on liquidity remains at 70,000,” AHL added.

JS Global analyst Muhammad Shuja Qureshi said that the market closed at another record high level.

Pharmaceutical stocks led the rally as the Lahore High Court vacated the order against the deregulation of maximum retail prices of non-essential drugs, he said.

Buying was also witnessed in auto, refinery, oil and gas sectors with Ghandhara Automobiles and National Refinery closing at their upper locks. On the other hand, cement and steel stocks saw profit-taking.

“Investors are advised to view dips as an opportunity to accumulate value stocks,” the analyst added.

Overall trading volumes increased to 388.8 million shares against Wednesday’s tally of 361.8 million. The value of shares traded during the day was Rs17.9 billion.

Shares of 334 companies were traded. Of these, 204 stocks closed higher, 108 dropped and 22 remained unchanged.

Pakistan International Airlines Corp was the volume leader with trading in 47.2 million shares, gaining Rs0.97 to close at Rs26.19. It was followed by Cnergyico PK with 29.7 million shares, gaining Rs0.34 to close at Rs4.60 and Pakistan Petroleum with 21.2 million shares, gaining Rs2.1 to close at Rs110.17.

Foreign investors were net buyers of shares worth Rs296.9 million, according to the NCCPL.

Published in The Express Tribune, April 5^th, 2024.

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