PSX rebounds ahead of budget announcement

Some pre-budget optimism emerged at the Pakistan Stock Exchange (PSX) on Wednesday as the KSE-100 index rebounded following two consecutive sessions of significant declines.

The upturn followed Finance Minister Muhammad Aurangzeb’s assurance to the nation of efforts to stabilise the economy ahead of the federal budget presentation.

Earlier, the trading session began with a spike but soon investors adopted a wait-and-see approach, keeping a close watch on developments surrounding the budget announcement. Investor sentiment turned positive as the finance minister revealed while unveiling the Economic Survey 2023-24 on Tuesday that there were constructive talks with the IMF for a new loan programme.

Additionally, the Rs18.877 trillion budget for fiscal year 2024-25, potential China debt restructuring, reduction in Karachi Inter-bank Offered Rate (Kibor) and moves to tackle capital market speculation aided the market’s rise, which reached the intra-day high at 73,169. However, investors faced some pressure due to economic uncertainty, resulting in a slight drop in the index, which closed below the 73,000 mark.

“Stocks showed recovery over finance minister’s affirmation that the privatisation of state-owned enterprises would be pursued vigorously, plans to negotiate China debt restructuring and claims of IMF talks in the right direction,” said Ahsan Mehanti, MD of Arif Habib Corp. “Government’s proposal for a Rs18.9 trillion federal budget for FY25, reduction in Kibor rates after the SBP’s policy rate cut and speculation about capital market proposals played the role of catalysts in bullish close at the PSX.”

At the end of trading, the benchmark KSE-100 index recorded an increase of 207.94 points, or 0.29%, and settled at 72,797.43. Topline Securities, in its commentary, said the stock market turned green ahead of the budget.

“Pakistan equities began the day positively,” it said, adding that the market rebounded after two negative sessions, where Pakistan Petroleum, Systems Limited, Engro Corporation, Pakistan Oilfields and Pakistan State Oil collectively contributed 139 points to the KSE-100 index.

Arif Habib Limited (AHL), in its report, highlighted that the last session ahead of budget presentation closed modestly higher.

Key performers were Air Link Communication (+6.3%) and NetSol Technologies (+6.25%) over news that the budget would protect the IT sector, AHL noted.

Overall trading volumes decreased to 293.1 million shares against Tuesday’s tally of 372.5 million. The value of shares traded during the day was Rs10.5 billion.
K-Electric was the volume leader with trading in 28.4 million shares, gaining Rs0.14 to close at Rs4.64. It was followed by PIA Holding Company with 27.4 million shares, gaining Rs0.76 to close at Rs12.81 and WorldCall Telecom with 20.5 million shares, remaining unchanged at Rs1.29.
Foreign investors were net sellers of shares worth Rs663.7 million, according to the NCCPL.