PSX starts week strong despite trading halt

KSE-100 index gains 353.41 points, settles at 80,566.21

KARACHI:

Despite facing a temporary halt, the Pakistan Stock Exchange (PSX) began the week with significant gains of over 350 points amid the corporate earnings season and growing investor interest.

In the morning, trading began positively but it was soon disrupted by a fire incident at the PSX. Later, the situation was brought under control and trading resumed immediately after midday.

The KSE-100 index moved upwards due to investor optimism in the wake of government’s measures for tax reforms in the federal budget for FY25 and over prospects of a staff-level agreement with the International Monetary Fund (IMF).

Additionally, speculation surrounding robust corporate payouts, easing of State Bank of Pakistan’s (SBP) monetary policy and World Bank support for the privatisation of struggling state-owned enterprises (SOEs) further bolstered market sentiment.

Cement and banking sectors contributed significantly to the market’s upward momentum. Consequently, the index reached its intra-day high of 80,737.70 points and closed near the day’s high with notable gains.

“Stocks closed higher in the earnings season as investors eyed a staff-level agreement with the IMF after government’s measures for tax reforms in the federal budget,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Speculation about strong corporate payouts, potential easing of SBP policy and World Bank’s support for the private sector in the privatisation of ailing SOEs played the role of catalysts in bullish close at the PSX.”

At the end of trading, the benchmark KSE-100 index recorded gains of 353.41 points, or 0.44%, and settled at 80,566.21.

Topline Securities, in its report, said “trading was halted for two hours due to a fire that broke out on fourth floor of the stock exchange. The PSX building was evacuated and trading resumed once the blaze was controlled.”

Cement and banking sectors continued their positive momentum from last week, with Maple Leaf Cement, Fauji Cement, Lucky Cement, DG Khan Cement, Habib Bank, National Bank of Pakistan and Allied Bank cumulatively contributing 267 points to the index, Topline added.

Arif Habib Limited (AHL), in its report, commented that the market was “steady above 80,000 as the week started with a disrupted session following the eruption of fire at the PSX building.”

Some 59 shares rose while 39 fell with Habib Bank (+2.86%), National Bank (+8.55%) and Allied Bank (+9.1%) being the biggest contributors to the index’s gains, AHL said, adding that MCB Bank (-1%), Millat Tractors (-1.73%) and Pakistan Oilfields (-1.14%) were the biggest drags.

JS Global analyst Mubashir Anis Naviwala wrote that the KSE-100 started the day on a positive note, but trading soon came to a halt due to a fire at the PSX premises.

“Major buying was observed in banking stocks, although overall volumes remained low due to the shortened trading day,” he said. “Moving forward, a ‘buy-on-dips’ strategy is advised primarily in banking, tech, and oil and gas stocks,” the analyst added.

Overall trading volumes decreased to 261.6 million shares compared with Friday’s tally of 448.98 million. The value of shares traded during the day stood at Rs13.02 billion.

Shares of 427 companies were traded. Of these, 216 stocks closed higher, 158 fell and 53 remained unchanged.

Hum Network was the volume leader with trading in 20.7 million shares, gaining Rs0.5 to close at Rs11.36. It was followed by National Bank with 19.6 million shares, gaining Rs4.01 to close at Rs50.92 and The Bank of Punjab with 17.6 million shares, gaining Rs0.09 to close at Rs5.79.

Foreign investors were net sellers of shares worth Rs75.2 million, according to the NCCPL.