PSX eclipses record on Saudi pledge

Benchmark KSE-100 index rises 694.73 points, settles at 70,314.72

KARACHI:

Pakistan Stock Exchange (PSX) on Tuesday achieved another milestone as it breached the 70,000 barrier and rose to a new record high in the backdrop of favourable data of remittances that soared 16.4% year-on-year (YoY) to $2.95 billion in March 2024.

Initially, trading began at the intra-day low of 69,857.14 points but the KSE-100 index quickly turned north, driven by positive triggers including Saudi Arabia’s commitment to injecting $5 billion into Pakistan’s economy. The investment involved keeping deposits in the central bank and pouring capital into critical sectors like oil refineries and copper mines.

Consequently, the KSE-100 index rose above the 70,000 mark, reaching its intra-day high at 70,677.29 points before midday. Despite some minor fluctuations, the continued domination of positive reports helped the bourse to maintain the upward momentum.

Investors were also optimistic about the upcoming talks on a new International Monetary Fund (IMF) loan programme scheduled for next week, along with potential lowering of policy rate by the State Bank of Pakistan (SBP) amid declining inflation.

As a result, the market managed to stay well above the 70,000 level and close the day with significant gains.

“PSX reached a fresh record amid upbeat data of remittances that surged 16.4% YoY to $2.95 billion in March 2024 and affirmation of a $5 billion investment package from Saudi Arabia for economic support,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Speculation ahead of new IMF loan programme talks due next week and the potential easing of SBP policy rate amid falling inflation played the role of catalysts in record close at the PSX.”

At close, the benchmark KSE-100 index recorded a surge of 694.73 points, or 1%, and settled at 70,314.72.

Topline Securities, in its report, said that the KSE-100 index rallied for the second consecutive day when it gained 695 points and closed at 70,315 (up 1%).

“This positivity can be attributed to the commitment from Saudi Arabia to expediting the first wave of a $5 billion investment package, including increasing Saudi deposits in the central bank of Pakistan from $3 billion to $5 billion and injecting investment into an oil refinery (a Pakistani oil and gas companies’ joint venture with Saudi Aramco) and copper mines (Reko Diq),” it said.

Major positive contribution to the index came from Fauji Fertiliser, Meezan Bank, Hub Power Company, Mari Petroleum and Engro Fertilisers as they cumulatively contributed 471 points, Topline added.

In its review, Arif Habib Limited (AHL) said there were “additional day-on-day gains of 0.91%, which took the two-session week-on-week gains to 2.9%.”

Some 59 stocks rose while 34 fell with Fauji Fertiliser (+7.5%), Meezan Bank (+2.5%) and Hub Power (+1.51%) being the biggest contributors to index gains, it said.

“Support at 67,000 should hold declines with 73,000-75,000 being the potential upside targets,” AHL noted. “Cement stocks continue to look interesting for Q2 and having not participated year-to-date can now assume leadership.”

JS Global analyst Muhammad Shuja Qureshi said that bulls tossed the index to close at a record high of 70,315, up 695 points day-on-day.

“The index may move towards levels of 72,000 to 73,000, albeit with anticipated high market volatility,” the analyst added.

Overall trading volumes increased to 389.4 million shares against Monday’s tally of 335.8 million. The value of shares traded during the day was Rs17.3 billion.

Shares of 353 companies were traded. Of these, 181 stocks closed higher, 157 dropped and 15 remained unchanged.

WorldCall Telecom was the volume leader with trading in 34.4 million shares, losing Rs0.07 to close at Rs1.31. It was followed by Pakistan International Bulk Terminal with 27.8 million shares, gaining Rs0.19 to close at Rs6.17 and Pakistan International Airlines Corp with 19.04 million shares, gaining Rs0.5 to close at Rs26.55.

Foreign investors were net buyers of shares worth Rs688.6 million, according to the NCCPL.

Published in The Express Tribune, April 10^th, 2024.

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