Investor optimism propels PSX to new high

KSE-100 index surges 862.15 points, settles at 72,764.24

KARACHI:

Pakistan Stock Exchange (PSX) on Monday surged over 850 points to a new all-time high in the face of investor confidence due to falling inflation and the government’s discussion on the privatisation of struggling state-owned enterprises (SOEs).

Following the commencement of trading, the KSE-100 index reached the intra-day low at 72,462.49 points in the very first hour. However, the market quickly began its recovery, driven primarily by the rising foreign currency reserves and speculation surrounding the upcoming loan talks between Pakistan and the International Monetary Fund (IMF).

Additionally, deliberations with a Saudi trade delegation for potential investment avenues also contributed to the remarkable uptrend. As a result, the index crossed the 73,000 barrier, reaching the intra-day high at 73,060.74 in early afternoon.

Throughout the day, the market exhibited a robust momentum with several sectors performing well, particularly cement and pharmaceutical, which recorded notable gains. Despite falling below the 73,000 level, the bourse managed to close with a significant strength.

“Stocks closed at an all-time high as investors weighed the falling inflation, which could lead to the easing of State Bank’s policy, and government’s deliberations on the privatisation of ailing SOEs,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Speculation ahead of Pakistan-IMF loan talks, surging foreign exchange reserves and likely investment accords with a Saudi trade delegation played the role of catalysts in record close in a pre-budget rally at the PSX.”

At close, the benchmark KSE-100 index secured gains of 862.15 points, or 1.2%, and settled at 72,764.24.

Topline Securities, in its report, wrote that the KSE-100 index registered a bullish session. “Positive sentiment can be attributed to the recent news about a 50-member Saudi team arriving for potential investment in Pakistan along with expectations of an IMF mission coming this month to discuss a new programme,” it said.

Significant positive contribution came from Dawood Hercules Corp, Fauji Fertiliser, Engro Corporation, Interloop Limited and Hub Power, which collectively added 360 points to the index.

Conversely, Oil and Gas Development Company, Mari Petroleum, Systems Limited, Ibrahim Fibres and National Bank of Pakistan contributed negatively, erasing 68 points, Topline added.

Arif Habib Limited (AHL), in its commentary, said there was “another 1% gain day-on-day as the market’s bounce gained momentum.”

Some 71 shares rose while 27 fell with Dawood Hercules (+7.5%), Fauji Fertiliser (+2.68%) and Engro Corp (+1.95%) being the biggest contributors to the index gains, it said, adding that cement and pharma stocks outperformed with notable increases in Fauji Cement (+5.06%), DG Khan Cement (+2.94%), GlaxoSmithKline (+7.5%), Abbott Laboratories (+7.5%) and Citi Pharma (+6.17%).

Overall trading volumes increased to 578.4 million shares against Friday’s tally of 452.2 million. The value of shares traded during the day was Rs24.5 billion.

Shares of 389 companies were traded. Of these, 258 stocks closed higher, 108 dropped and 23 remained unchanged.

Pak Elektron was the volume leader with trading in 48.4 million shares, gaining Rs1.74 to close at Rs25.13. It was followed by Fauji Cement with 40.4 million shares, gaining Rs1.08 to close at Rs22.44 and K-Electric with 26.8 million shares, gaining Rs0.05 to close at Rs4.41.

Foreign investors were net buyers of shares worth Rs434.9 million, according to the NCCPL.

Published in The Express Tribune, May 7^th, 2024.

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