Stocks surge as bulls stage comeback

KSE-100 index gains 335.07 points, settles at 78,275.65

KARACHI:

Bulls staged a comeback at the Pakistan Stock Exchange on Wednesday, as the benchmark KSE-100 index snapped a two-day losing streak and powered past the 78,000-point level.

Earlier, trading began with a spike and the index rallied to touch the intra-day high of 78,679.49 points as investors expressed confidence that the budget was likely to be passed in the upcoming National Assembly sessions.

Government’s plans for the privatisation of state-owned enterprises (SOEs), in the wake of the prime minister’s assurance of holding the bidding process for Pakistan International Airlines (PIA) in August 2024, triggered further positivity in the market.

Investor confidence grew also because of the cabinet’s approval for the payment of Rs82 billion, which boosted the stock of Oil and Gas Development Company (OGDC) by 4.87%.

Moreover, rupee stability owing to the approval of $535 million in World Bank financing fuelled the bullish momentum. After remaining positive throughout the day, the KSE-100 index closed in the green above the 78,000 mark.

“Stocks showed a sharp recovery as investors weighed the government’s deliberation on the privatisation of SOEs following PM’s assurance of holding the PIA bidding process in August this year,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Rupee recovery amid approval of $535 million in World Bank financing and speculation ahead of the fiscal year’s end, new IMF loan talks due next month and easing of the SBP’s policy rate played the role of catalysts in bullish activity at the PSX.”

At the end of trading, the benchmark KSE-100 index recorded a rise of 335.07 points, or 0.43%, and settled at 78,275.65.

Topline Securities, in its report, stated that the KSE-100 index experienced a positive session as investors showed confidence that the budget would likely be passed in the upcoming National Assembly sessions.

In the oil and gas exploration sector, OGDC saw a significant rise of 4.87% following news that the cabinet had approved a payment of Rs82 billion in its favour.

Major contributors to the index’s upward movement were Fauji Fertiliser Company, OGDC, Bank AL Habib, Pakistan Petroleum and Engro Fertilisers, which collectively added 486 points, Topline added.

Arif Habib Limited (AHL), in its commentary, noted that near-term support levels attracted buyers in selective names with the indices seeing their first close in the green since June 20.

The headline inflation was projected to reach 12.1% in June 2024, marking a slight increase from the previous month’s year-on-year rate of 11.8%, it said.

June’s figure suggested that the average Consumer Price Index for FY24 would settle at 23.8%, a marked improvement from the FY23 average of 29%. “This trend of decreasing inflation is expected to persist, driven primarily by a high base effect, stable rupee-dollar parity and lower commodity prices,” AHL added.

JS Global analyst Mohammed Waqar Iqbal noted that the stock market opened on a positive note, where the index remained in the green zone throughout the day.

However, investors preferred to book profits at higher levels. Later, positive news regarding OGDC invited some fresh buying, the analyst said.

Overall trading volumes increased to 469.8 million shares against Tuesday’s tally of 292.2 million. The value of shares traded during the day was Rs19.8 billion.

Shares of 454 companies were traded. Of these, 149 stocks closed higher, 248 fell and 57 remained unchanged.

WorldCall Telecom was the volume leader with trading in 57.6 million shares, losing Rs0.04 to close at Rs1.24. It was followed by K-Electric with 37.6 million shares, gaining Rs0.15 to close at Rs4.58 and Pervez Ahmed Company with 31.1 million shares, losing Rs0.5 to close at Rs1.79.

Foreign investors were net buyers of shares worth Rs492.1 million, according to the NCCPL.