Oil, banking sectors continue to fuel bull run

KSE-100 index gains 252.61 points, settles at 78,528.25

KARACHI:

Pakistan Stock Exchange (PSX) on Thursday continued its bullish momentum as it extended gains from the previous session, driven primarily by a surge in stock valuations in the oil and banking sectors.

The trading session commenced with a spike when the KSE-100 index touched the intra-day high of 78,978.60 points. The index continued its positive sentiment with minor ups and downs towards the close of trading.

The bull-run was also powered by the results of a T-bills’ auction, which hinted at a rate cut in the next monetary policy statement, as well as expectations for a smooth federal budget approval.

News regarding government’s plans to abolish up to 15% additional income tax on the profit banks were making on loans extended to the cash-strapped finance ministry also bolstered investor interest.

Though investors resorted to profit-taking later in the day that pushed the index to the intra-day low of 78,294.22 points, the KSE-100 managed to maintain the positive sentiment and closed above 78,500 points.

“Stocks closed higher, led by oil and banking shares on strong valuations,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Finance minister’s proposal to abolish 15% additional tax on bank profits, the government’s approval of Rs82 billion to pay for principal dues of Oil and Gas Development Company and Rs92 billion in interest payment, and deliberations on the privatisation of state-owned enterprises 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 252.61 points, or 0.32%, and settled at 78,528.25.

Topline Securities, in its report, highlighted that Pakistan’s equity market had a positive day.

Fertiliser, banking, cement and exploration and production (E&P) sectors contributed positively, with Fauji Fertiliser Company, United Bank, Thal Limited, Oil and Gas Development Company and Mari Petroleum collectively adding 214 points, Topline said.

Arif Habib Limited (AHL), in its commentary, noted that there were “additional gains with improving market breadth as the index attempted to carve out support at 78,000”.

On the other hand, Engro Corporation (-1.49%), MCB Bank (-1.31%) and Meezan Bank (-0.95%) were the largest drags on the index.

“For Friday holding above 78,000 will potentially set up moves back towards 80,000,” AHL added.

JS Global analyst Mohammed Waqar Iqbal noted that bulls continued to dominate proceedings at the stock market.

The surge was driven by the latest T-bills’ auction results, which indicated a potential rate cut in the upcoming monetary policy statement, along with expectations that the FY25 federal budget would be approved without significant opposition.

Some profit-taking was witnessed later but the index managed to stay in the green, he said. “Investors are advised to take positions in cement, tech, and oil and gas stocks,” the analyst added.

Overall trading volumes decreased to 283.5 million shares against Wednesday’s tally of 469.8 million. The value of shares traded during the day was Rs11.1 billion.

Shares of 426 companies were traded. Of these, 211 stocks closed higher, 150 fell and 65 remained unchanged.

WorldCall Telecom was the volume leader with trading in 27.6 million shares, gaining Rs0.01 to close at Rs1.25. It was followed by K-Electric with 21.97 million shares, gaining Rs0.09 to close at Rs4.67 and Oil and Gas Development Company with 16.9 million shares, gaining Rs1.83 to close at Rs137.17.

Foreign investors were net sellers of shares worth Rs2.03 million, according to the NCCPL.