PSX hits record above 73k in pre-budget rally

KARACHI:

In its pre-budget rally, the Pakistan Stock Exchange (PSX) rose to an all-time high above the 73,000 barrier, driven by robust data showing a 28% year-on-year (YoY) increase in remittances and a surge in foreign currency reserves to $9.12 billion.

Though the trading day commenced on a positive note, the KSE-100 index soon dipped to the intra-day low of 72,876.83 points. It recovered quickly as the day progressed and managed to remain in the green for the rest of the day despite frequent fluctuations.

The upward trajectory was attributed to stability of the Pakistani rupee on the back of rising foreign exchange reserves and speculation about negotiations with the IMF for a new and larger loan programme.

Additionally, the cement sector performed exceptionally well, propelled by the government’s ambitious target of enhancing the Public Sector Development Programme (PSDP) by 27% to Rs1.2 trillion for FY25.

Resultantly, the market rose to the intra-day high of 73,449.37 points and remained relatively stable in the afternoon. Later, selling pressure erased about half of the gains, but the bourse still ended trading above the 73,000 mark, marking its highest close in history.

“Stocks closed at an all-time high in a pre-budget rally after robust data showed remittances at $2.81 billion, up 28% YoY, in April 2024,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Cement sector outperforming over government’s target of 27% hike in PSDP to Rs1.2 trillion for FY25, rupee stability on surging forex reserves and speculation about Pakistan-IMF loan talks played the role of catalysts in record close at the PSX.”

At close, the benchmark KSE-100 index recorded a notable increase of 427.45 points, or 0.59%, and settled at 73,085.50.

Topline Securities, in its report, stated that a “range-bound activity was observed during early hours, however, as the day progressed a rally emerged in the market”.

“This positivity can be attributed to the weekly Sensitive Price Indicator (SPI), which posted a decline for the fourth consecutive week (down 1.39% week-on-week,” it said, adding that cement and steel sectors were in the limelight, closing higher than their previous levels.

Arif Habib Limited (AHL), in its report, said that it was “a decent week for the KSE-100 (+1.5%) and an exceptional one for cement and pharma names.”

Lucky Cement (+3.12%), DG Khan Cement (+6.57%) and Pioneer Cement (+7.5%) were the biggest contributors to the index gains. “Friday saw all cement names going aggressively higher, which lifted the KSE-100 through the previous week’s high,” AHL added.

Overall trading volumes increased to 741.2 million shares against Thursday’s tally of 674.98 million. The value of shares traded during the day was Rs25.3 billion.

Shares of 381 companies were traded. Of these, 217 stocks closed higher, 132 dropped and 32 remained unchanged. WorldCall Telecom was the volume leader with trading in 85.7 million shares, gaining Rs0.04 to close at Rs1.55. It was followed by Hum Network with 51.5 million shares, losing Rs0.33 to close at Rs9.70 and Pak Elektron with 33.6 million shares, gaining Rs1.43 to close at Rs28.98. Foreign investors were net buyers of shares worth Rs84.2 million, according to the NCCPL.

Published in The Express Tribune, May 11^th, 2024.

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