Modest CPI, IMF talks propel PSX higher

KSE-100 index gains 379.37 points, settles at 78,824.33

KARACHI:

Pakistan Stock Exchange (PSX) concluded the first day of the new fiscal year on a promising note with gains of nearly 380 points, influenced by economic developments and sector-specific news.

In the morning, trading remained lacklustre, when the KSE-100 index reached the intra-day low of 78,427.79 points. However, as the day progressed, the market gradually recovered and moved upwards.

The uptrend was primarily driven by a modest Consumer Price Index (CPI)-based inflation of 12.6% year-on-year in June 2024 and expectations of an International Monetary Fund (IMF) loan agreement worth $6-8 billion.

Additionally, government’s initiatives including plans for $1.5 billion worth of Panda bonds, Eurobond and Sukuk, aimed at attracting foreign investment and resolving the circular debt crisis, boosted investor confidence.

Notably, the cement sector drew investor interest following price hike, contributing to the market’s positive momentum. Consequently, the KSE-100 index touched the intra-day high of 79,536.22 points.

Despite falling below the 79,000 barrier due to profit-taking before the close of trading, the index ended the day with substantial gains.

“Stocks closed higher amid thin CPI inflation at 12.6% in June 2024 and the finance minister’s affirmation of a larger and longer bailout agreement with the IMF this month in the wake of positive talks for a $6-8 billion loan,” said Ahsan Mehanti, MD of Arif Habib Corp.

“The government’s plan to issue $1.5 billion worth of Panda bonds, Eurobond and Sukuk to seek foreign inflows and resolve the circular debt crisis played the role of catalyst in bullish activity at the PSX.”

At the end of trading, the benchmark KSE-100 index recorded a rise of 379.37 points, or 0.48%, and settled at 78,824.33.

Topline Securities, in its report, said the stock market began the week on a positive note.

“The cement sector attracted investor interest as the industry increased the price of a cement bag by approximately Rs125 in the southern region, effective from July 1, 2024, to offset the impact of a higher federal excise duty,” it said.

Key contributors to the index included Pakistan Petroleum, Engro Fertilisers, United Bank, Service Industries and Pakistan Tobacco, which collectively added 274 points. On the flip side, Engro Corp, Lucky Cement, Mari Petroleum, Cherat Cement and Thal Limited erased 102 points from the index, Topline added.

Arif Habib Limited (AHL), in its report, remarked that the PSX kicked off the week with gains, which extended up to 79,500 points, before coming off in the second half of the session.

Pakistan Petroleum (+3.19%), Engro Fertilisers (+2.33%) and United Bank (+1.11%) were the biggest contributors to the index gains while Engro Corp (-1.07%), Lucky Cement (-0.85%) and Mari Petroleum (-0.79%) were the major drags, AHL added.

JS Global analyst Mohammed Waqar Iqbal wrote that the market opened on a positive note on the first day of the fiscal year.

“Looking ahead, the market is expected to remain in the accumulation phase in the near term due to the upcoming corporate result announcements,” the analyst added.

Overall trading volumes decreased to 306.04 million shares from Friday’s tally of 347.7 million. The value of shares traded came in at Rs13.7 billion.

Shares of 425 companies were traded. Of these, 183 stocks closed higher, 186 fell and 56 remained unchanged.

PTCL led the volumes with trading in 30.2 million shares, gaining Rs0.64 to close at Rs12.65. It was followed by WorldCall Telecom with 17.4 million shares, losing Rs0.01 to close at Rs1.25 and Faysal Bank with 13.6 million shares, gaining Rs2.03 to close at Rs54.47.

Foreign investors were net sellers of shares worth Rs457.9 million, according to the NCCPL.