Payout hopes propel PSX to new high

KARACHI:

Pakistan Stock Exchange (PSX) closed at an all-time high with modest gains on Tuesday amid speculation about the corporate earnings season, which sparked interest in selected oil and banking stocks on expectations of high dividend payouts.

In the morning, trading began on a sluggish note with the KSE-100 index reaching its intra-day low of 80,530.85 points. However, the market quickly gained momentum due to investor expectations about the restructuring of $15 billion worth of Chinese energy debt ahead of a new International Monetary Fund (IMF) loan programme.

Government’s discussions on the privatisation of struggling state-owned enterprises (SOEs) contributed to the bullish trend, which instilled confidence among investors.

The positive momentum was mainly witnessed in fertiliser, exploration and production (E&P), and textile sectors. As a result, the index touched its intra-day high of 81,087.42 points before midday.

Later, market players resorted to some profit-taking and the index closed with modest gains of over 100 points.

“Stocks closed at an all-time high amid speculation in the earnings season, led by selected oil and banking shares on expectations of high dividend payouts,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Investor hopes for the resolution of $15 billion Chinese energy debt issue ahead of the IMF bailout deal and government deliberations over 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 105.86 points, or 0.13%, and settled at 80,672.06.

Topline Securities, in its report, said “Pakistan’s equity market exhibited a mixed pattern. The KSE-100 index surged to the intra-day peak of 81,087 points before settling at 80,672, reflecting modest gains of 106 points, or 0.13%.”

Leading the market’s positive momentum were the fertiliser, E&P and textile sectors, bolstered by companies like Fauji Fertiliser, Pakistan Oilfields, Interloop Limited, Engro Fertilisers and Fauji Fertiliser Bin Qasim, which collectively contributed 183 points, Topline added.

Arif Habib Limited (AHL), in its report, commented that the KSE-100 continued to consolidate above 80,000 points as selected stocks put in a strong performance.

Some 56 shares rose while 43 fell where Fauji Fertiliser (+1.71%), Pakistan Oilfields (+1.67%) and Interloop Limited (+4.33%) were the biggest contributors to the index gains, AHL said, adding that Hub Power (-1.34%), United Bank (-1.16%) and Habib Bank (-1.7%) were the largest drags.

JS Global analyst Mubashir Anis Naviwala wrote that bullish activities continued at the PSX where the KSE-100 crossed the 81,000 mark for the first time in history as investors were optimistic about the next IMF programme.

Positive expectations about the upcoming corporate results also kept the sentiment robust, he said, adding that most of the buying was seen in automobile and tech stocks.

Overall trading volumes increased to 610.3 million shares compared with Monday’s tally of 261.6 million. The value of shares traded during the day stood at Rs24.3 billion.

Shares of 450 companies were traded. Of these, 216 stocks closed higher, 190 fell and 44 remained unchanged.

K-Electric was the volume leader with trading in 51.03 million shares, gaining Rs0.18 to close at Rs4.91. It was followed by The Bank of Punjab with 43.3 million shares, gaining Rs0.14 to close at Rs5.93 and WorldCall Telecom with 40.8 million shares, losing Rs0.02 to close at Rs1.24.

Foreign investors were net buyers of shares worth Rs69.7 million, according to the NCCPL.