PSX rises past 75,000 as optimism returns

KARACHI:

Pakistan Stock Exchange (PSX) rebounded and crossed the 75,000-point mark on Thursday, buoyed by positive sentiment as investors anticipated an imminent reduction in policy rate and progress on resolving the circular debt crisis under a new International Monetary Fund (IMF) programme.

In a mixed session, the KSE-100 index started the day on a lacklustre note and dropped to the intra-day low at 74,726.06 points in the first hour. However, after fluctuating between green and red zones in a narrow range, the market bounced back at midday.

The fall in government’s bond yields, leading to a potential reduction in the State Bank of Pakistan (SBP)’s policy rate, sparked buying interest and pushed the index upwards.

Furthermore, investors were optimistic about the resolution of the circular debt challenge as part of the new IMF loan package.

Index-heavy sectors, particularly fertiliser, power and exploration and production (E&P), helped take the KSE-100 to the intra-day high of 75,284.74 towards the close of trading. The bourse closed with gains of over 150 points.

“Stocks recovered amid falling government bond yields, which was expected to result in easing of the SBP’s policy next month,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Speculation in the pre-budget session on talk of government’s prior actions on energy, tax and tariff matters for a new IMF deal, deliberations on the privatisation of state units and foreign inflows played the role of catalysts in higher close at the PSX.”

At the end of trading, the benchmark KSE-100 index recorded an increase of 157.80 points, or 0.21%, and settled at 75,114.47.

Topline Securities, in its report, stated that Pakistan’s equity market experienced a mixed day.

Fertiliser, power and E&P sectors made a positive contribution with Oil and Gas Development Company, K-Electric, Fauji Fertiliser Company and Hub Power collectively adding 175 points. Conversely, Engro Fertilisers, MCB Bank and United Bank lost 110 points, Topline added.

Read PSX succumbs to profit-taking, falls below 75k

Arif Habib Limited (AHL), in its review, wrote “stickiness continued for the KSE-100 at 75,000”.

Attock Refinery (-0.21%) was in talks with banks including Habib Bank, United Bank and Standard Chartered for a loan that would fund 60% of its expansion project costing $600 million, it said.

The 74,000 level “remains the near-term support, which keeps upside prospects alive, however, declines below 74,000 can trigger a 5% drawdown,” AHL added.

JS Global analyst Mohammed Waqar Iqbal said the stock market opened positively as investors took new positions in the E&P sector, anticipating positive developments in relation to the circular debt in light of the new IMF programme.

“Going forward, the market is anticipated to remain on an accumulation phase,” the analyst added.

Overall trading volumes increased to 758.9 million shares against Wednesday’s tally of 584.5 million. The value of shares traded during the day was Rs16.7 billion.

Shares of 376 companies were traded. Of these, 192 stocks closed higher, 156 dropped and 28 remained unchanged.

K-Electric was the volume leader with trading in 191.6 million shares, gaining Rs0.53 to close at Rs5.24. It was followed by WorldCall Telecom with 94.8 million shares, gaining Rs0.1 to close at Rs1.45 and Symmetry Group with 47.7 million shares, losing Rs0.2 to close at Rs5.74.

Foreign investors were net buyers of shares worth Rs277.1 million, according to the NCCPL.

Published in The Express Tribune, May 24^th, 2024.

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