UAE investment hopes drive PSX to record

KSE-100 index soars 868.56 points, settles at 75,983.04

KARACHI:

Pakistan Stock Exchange (PSX) on Friday soared to a new all-time high close to the 76,000 mark, fuelled by assurances of $10 billion investment by the United Arab Emirates (UAE) and the International Monetary Fund (IMF)’s statement that Pakistan had made significant progress towards reaching a staff-level agreement.

Earlier, trading commenced on a bullish note and the bourse rose steadily till the midday break. Following the resumption of trading, the KSE-100 moved further north, reaching its intra-day high of 76,248.76 points.

However, some profit-taking pulled the index down, but the market still ended trading at a record high near 76,000 points.

Among other major drivers were the appreciation of the Pakistani rupee, which gained Rs0.09 to Rs278.21 against the US dollar, and the receding of weekly inflation by 0.34%.

Investors were highly optimistic that Pakistan would be able to win a larger and longer IMF loan programme. Pre-budget speculation also provided support to the market.

“Stocks closed at an all-time high in a pre-budget rally led by across-the-board investor interest after the UAE pledged an investment of $10 billon in multiple sectors amid a stable rupee and surging foreign currency reserves,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Expectations of a reduction in the SBP’s policy rate next month, government’s deliberations on privatisation of state units and foreign fund inflows played the role of catalysts in record close at the PSX.”

At the close of trading, the benchmark KSE-100 index registered a significant rise of 868.56 points, or 1.16%, and settled at 75,983.04.

Topline Securities, in its report, mentioned that a positive session was observed as the index gained 869 points.

“This positivity can be attributed to the IMF’s statement that Pakistani authorities and the fund have made significant progress towards reaching a staff-level agreement as talks concluded,” it said.

Major positive contributors were United Bank Limited, MCB Bank, Meezan Bank, Hub Power and Engro Fertilisers as they cumulatively added 414 points, Topline added.

Arif Habib Limited (AHL), in its commentary, wrote “76k was finally tagged with the KSE-100 index, which gained 0.87% week-on-week.”

United Bank (+3.57%), Hub Power (+2%) and Meezan Bank (+2.34%) were the biggest contributors to the index gains. On the contrary, TRG Pakistan (-1.23%), Cherat Cement (-1.56%) and EFU General Insurance (-5.26%) dragged the index down.

“Significant progress has been made in IMF-Pakistan talks for reaching a staff-level agreement on a comprehensive economic policy and reforms programme,” it pointed out.

“With the market having hit 76k, further gains can be seen. However, declines below 74k would be suggestive of the onset of a corrective period,” AHL added.

JS Global analyst Mohammed Waqar Iqbal noted that state institutions were active buyers in the market where the KSE-100 gained 868 points day-on-day.

“Going forward, the market is anticipated to maintain its accumulation phase in the near term,” the analyst added.

Overall trading volumes decreased to 609.8 million shares against Thursday’s tally of 758.9 million. The value of shares traded during the day was Rs23.6 billion.

Shares of 383 companies were traded. Of these, 215 stocks closed higher, 145 dropped and 23 remained unchanged.

K-Electric was the volume leader with trading in 130.1 million shares, losing Rs0.03 to close at Rs5.21. It was followed by WorldCall Telecom with 50.6 million shares, losing Rs0.03 to close at Rs1.42 and Dewan Cement with 28.3 million shares, gaining Rs0.66 to close at Rs10.91.

Foreign investors were net buyers of shares worth Rs506.4 million, according to the NCCPL.

Published in The Express Tribune, May 25^th, 2024.

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