Pakistan Stock Exchange (PSX) on Friday continued its extensive buying spree as the KSE-100 index shot up to a new record peak above 75,000 points with investors taking cue from the current account surplus and a surge in central bank’s foreign currency reserves.
The government’s determination to seek an extension in debt payments to Chinese power producers also aided the market’s march towards north because the move may lead to a decrease in energy costs.
In another positive news report, Pakistani rupee bounced back against the US dollar following a jump in the State Bank’s foreign currency reserves to more than $9 billion.
In the morning, trading kicked off on a positive note and the market rose rapidly in the very first hour. Thereafter, the KSE-100 index fluctuated with ups and downs till midday.
It reached its intra-day high at 75,401.12 points with a spike in investor interest towards the close of trading.
“Stocks closed at an all-time high as investors weighed the current account surplus of $491 million for April 2024 and the surge in total forex reserves to $14.62 billion,” said Ahsan Mehanti, MD of Arif Habib Corp.
“Government’s resolve to seek an extension in $15.36 billion worth of debt payment to Chinese IPPs, foreign fund inflows and a deal between the government and fertiliser manufacturers on controlling urea prices played the role of catalysts in record close at the PSX.”
At the end of trading, the benchmark KSE-100 index recorded an increase of 411.65 points, or 0.55%, and settled at 75,342.35.
Arif Habib Limited (AHL), in its report, wrote that the KSE-100 closed above 75k with gains of 3.05% week-on-week.
Dawood Hercules Corporation (+4.76%), Hub Power (+1.02%) and Thal Limited (+7.5%) were the biggest contributors to the index gains on Friday. On the other hand, Service Industries (-2.93%), Lucky Cement (-0.59%) and MCB Bank (-0.36%) were the largest drags.
In a key development, Pakistan posted a current account surplus of $491 million for April 2024. In addition, the government may seek a five-year extension in the repayment of $15.4 billion worth of debt to Chinese independent power producers (IPPs). It was part of Prime Minister Shehbaz Sharif’s push to reduce energy costs, which included cutting the tariff paid to power producers. Pakistan was also planning to sell bonds, due on September 19, 2039, with an 11% coupon rate on May 23, 2024.
JS Global analyst Mohammed Waqar Iqbal, in his review, wrote that the stock market opened on a positive note, but some investors preferred to book profit and trim positions ahead of the rollover week.
The KSE-100 index eventually closed 411 points higher at 75,342. “Going forward, the market is anticipated to maintain its upward momentum,” the analyst predicted.
Overall trading volumes increased to 496.7 million shares against Thursday’s tally of 407.6 million. The value of shares traded during the day was Rs17.6 billion.
Shares of 386 companies were traded. Of these, 212 stocks closed higher, 153 dropped and 21 remained unchanged.
Kohinoor Spinning Mills was the volume leader with trading in 44.6 million shares, gaining Rs0.19 to close at Rs4.85. It was followed by Pakistan International Airlines Corp with 28.8 million shares, losing Rs1.89 to close at Rs24.31 and K-Electric with 23.1 million shares, losing Rs0.04 to close at Rs4.57.
Foreign investors were net buyers of shares worth Rs127.02 million, according to the NCCPL.
Published in The Express Tribune, May 18th, 2024.
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