Post-budget, PSX hits historic high

Index notches up largest one-day gain of 3,410.73 points, settles at 76,208.16

KARACHI:

Bulls returned with a bang at the Pakistan Stock Exchange (PSX) on Thursday in a post-budget rally and propelled the KSE-100 index to an all-time high above the 76,000 milestone with the biggest single-day surge of around 3,400 points.

Earlier, the bourse opened on a buoyant note as investors cheered the absence of any hike in taxes on capital gains and dividend income in the federal budget for fiscal year 2024-25, contributing to the positive sentiment.

Investors turned optimistic as concerns over a stringent budget evaporated because the government maintained status quo in taxation measures for filers of tax returns and over projections of a substantial increase in dividends from state-owned enterprises (SOEs).

As stock market players saw the federal budget as investor-friendly, the KSE-100 skyrocketed to the intra-day high of 76,338.14 points. After remaining in the green throughout the day, the bourse settled at the historic high above 76,000.

“Stocks showed a record surge after the proposed federal budget, which was seen as investor-friendly owing to the status quo in tax measures for filers, and a massive increase in the SOEs’ dividend projection to Rs138 billion for FY25,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Government’s focus on appeasing the IMF with a Rs18.9 trillion budget to pave the way for a $8 billion bailout programme, higher GDP growth target of 3.6%, lower fiscal deficit target of 6.9% and the projection of Rs30 billion in privatisation proceeds played the role of catalysts in bullish close at the PSX.”

At the end of trading, the benchmark KSE-100 index registered a massive surge of 3,410.73 points, or 4.69%, and settled at 76,208.16.

Topline Securities CEO Mohammed Sohail attributed the market’s rapid march towards north to the “absence of tax increase on dividends and capital gains for investors in the new budget”.

“The KSE-100 index recorded a remarkable surge of 3,411 points, marking an all-time high and the biggest single-day gain,” he said.

Arif Habib Limited (AHL), in its report, said “fears of a harsh budget for the market failed to materialise and the indices moved aggressively higher”.

The largest contribution to the KSE-100 index came from Hub Power, MCB Bank and United Bank while the biggest drags were Colgate-Palmolive and Interloop Limited.

“Week-on-week, the KSE-100 is currently up 3.2% with one session to go ahead of Eid holidays,” AHL said. “With the benchmarks back above the key 75,000 and 24,000 levels, records can again be set on the upside.”

JS Global analyst Mubashir Anis Naviwala said bulls took charge as the market welcomed the new budget, taking the index to an all-time high of 76,338 during the day.

“Good price performance was witnessed across the board,” he said. “As we look forward, we recommend investors to consider a buy-on-dips strategy, with a special focus on the cement, exploration and production, and technology sectors,” the analyst added.

Overall trading volumes increased to 635.5 million shares against Wednesday’s tally of 293.1 million. The value of shares traded during the day was Rs30.7 billion.

Shares of 425 companies were traded. Of these, 294 stocks closed higher, 87 dropped and 44 remained unchanged.

K-Electric was the volume leader with trading in 66.8 million shares, gaining Rs0.08 to close at Rs4.72. It was followed by Fauji Cement with 39.8 million shares, gaining Rs1.87 to close at Rs24.14 and WorldCall Telecom with 21.8 million shares, gaining Rs0.04 to close at Rs1.33.

Foreign investors were net sellers of shares worth Rs943.7 million, according to the NCCPL.