Pakistan Stock Exchange (PSX) on Friday made a handsome recovery after enduring losses earlier in the week as the KSE-100 index surged 1,000 points over expectations of a marked fall in inflation as well as government’s development spending and growth projections for next year.
In the morning, following a slight dip, the bourse started ascending gradually and the trend continued till the midday break. Later, with some ups and downs, the index touched its intra-day high at 75,953.74 points towards the close of trading.
Amongst positive triggers for the market were projections that inflation may slow down to a two-year low of 13-13.5% in May. In another cue, Pakistani currency appreciated Rs0.17 to Rs278.33 against the US dollar in the inter-bank market.
The bourse apparently ignored a nominal drop of $63 million in foreign currency reserves that reached $9.09 billion and remained optimistic ahead of the budget presentation. The index closed near the day’s high with impressive gains.
“Stocks surged across the board ahead of the federal budget for FY25, propelled by reports of proposed development spending exceeding Rs1.22 trillion, GDP growth target of 3.6% and potential resolution of the dispute over outstanding dues of around $2 billion for CPEC projects and Chinese power producers during the prime minister’s visit to Beijing next week,” said Ahsan Mehanti, MD of Arif Habib Corp.
“Expected reduction in the State Bank’s policy rate amid fall in government’s bond yields, meagre increase of 0.11% in the Sensitive Price Indicator (SPI) and pre-budget speculation about capital market proposals played the role of catalysts in positive close at the PSX.”
At the close of trading, the benchmark KSE-100 index posted gains of 1,000.35 points, or 1.34%, and settled at 75,878.48.
Topline Securities, in its commentary, noted that the bourse recorded a positive session as the index gained 1.34% and closed at 75,878. “This positivity can be attributed to the recovery in the market where the index had dropped 1,100 points since the start of the week,” it said.
The inflation rate measured by the Consumer Price Index (CPI), which would be unveiled on Saturday, garnered investor interest on expectations of a decline to 13-13.5% for May versus 17.3% in April.
Key contribution to the index came from Systems Limited, Hub Power, Meezan Bank, Engro Corporation, Fauji Fertiliser and MCB Bank as they cumulatively added 548 points, Topline added.
Arif Habib Limited (AHL), in its report, wrote that a strong Friday session kept the week-on-week (WoW) decline to a minimum at 0.17%.
Systems Limited (+7.23%), Hub Power (+2.63%) and MCB Bank (+2.87%) were the biggest contributors to the index gains, it said. “The upcoming week is anticipated to offer clarity regarding the near-term direction of the market,” AHL noted.
Overall trading volumes increased to 523.3 million shares against Thursday’s tally of 410.6 million. The value of shares traded during the day was Rs20.6 billion.
Shares of 433 companies were traded. Of these, 236 stocks closed higher, 140 dropped and 57 remained unchanged.
K-Electric was the volume leader with trading in 62.2 million shares, gaining Rs0.1 to close at Rs4.96. It was followed by Dewan Cement with 31.6 million shares, losing Rs0.12 to close at Rs10.94 and WorldCall Telecom with 28.5 million shares, gaining Rs0.01 to close at Rs1.35.
Foreign investors were net buyers of shares worth Rs193.7 million, according to the NCCPL.
Published in The Express Tribune, June 1st, 2024.
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