Corporate results fuel PSX rally

KARACHI:

Pakistan Stock Exchange (PSX) on Thursday rallied and surged around 750 points, buoyed by strong corporate earnings and expectations about government measures to manage its external account and secure debt rollovers.

In the morning, the trading day began on a positive note with continuous fluctuations in the KSE-100 index well after midday. Investors lacked enthusiasm and the index remained almost flat through the first half after which it hit the intra-day low of 77,085.48 points.

Later, the bourse rose steeply in an abrupt rally that took the index to the intra-day high of 77,969.27 points. A major boost came from the financial results of Mari Petroleum, which announced the highest-ever profit and 800% bonus shares.

Investors mainly showed interest in stocks of cement, commercial banks, oil and gas exploration companies and oil marketing companies' sectors.

"Stocks closed sharply higher as investors weighed the decline in government treasury bond yields along with strong corporate earnings and payouts in the oil sector," stated Ahsan Mehanti, MD of Arif Habib Corp.

"The bullish close was also fueled by the surge in global equities, SBP's assurance of manageable external sector conditions, finance minister's affirmation of economic stability, positive evaluations by credit rating agencies and anticipated IMF board approval of the Extended Fund Facility (EFF) this month."

At the end of trading, the benchmark KSE-100 index posted sharp gains of 759.73 points, or 0.99%, and settled at 77,874.22.

Topline Securities, in its report, wrote that Pakistan equities commenced the day with sideways trading. In initial hours, the KSE-100 index saw investors cherry-pick stocks in cyclical sectors post-Wednesday T-bills' auction, where a more-than-expected fall in yields put cement, steel and auto stocks on investors' radar.

However, a big surprise of the day was Mari Petroleum's FY24 results, where it announced the highest-ever profit and 800% bonus shares.

The bonus payout was a big surprise and helped Mari stock hit its upper circuit in a matter of a couple of minutes. It was also the highest contributor of the day by adding 221 points to the index, Topline added. Arif Habib Limited (AHL), in its report, pointed out that the struggle to surpass 78,000 continued with the KSE-100 reaching a high of 77,874.

Some 58 shares rose while 40 fell with Mari Petroleum (+10%), Oil and Gas Development Company (+7.29%) and Pakistan Petroleum (+3.15%) being the biggest contributors to the index gains.

Mari Petroleum announced FY24 earnings per share of Rs579.36, up 38% year-on-year, along with dividend per share of Rs232 and eight bonus shares for every one share held (800%). "The results exceeded expectations and pushed the stock price to new all-time highs," it said.

Price action in leading stocks such as Airlink Communication (+8.26%) and Fauji Fertiliser Bin Qasim (+7.08%), coupled with momentum in exploration and production stocks, suggested that the KSE-100 may regain the 78k level, AHL added.

JS Global analyst Mohammed Waqar Iqbal noted that after a sluggish start, the market saw a significant boost in the latter half, driven by a major payout announcement from Mari Petroleum.

It led to increased buying in the oil and gas sector, pushing the index to the intra-day high of 77,953, up 839 points. Mari Petroleum, Oil and Gas Development Company and Pakistan Petroleum were the key drivers, contributing 488 points.

The analyst advised investors to focus on sectors that were expected to perform well in future.

Overall trading volumes increased to 493.1 million shares compared with Wednesday's tally of 447.5 million. The value of shares traded during the day was Rs25.8 billion.

Shares of 434 companies were traded. Of these, 182 stocks closed higher, 198 fell and 54 remained unchanged.

Kohinoor Spinning Mills was the volume leader with trading in 93.9 million shares, losing Rs0.02 to close at Rs5.82. It was followed by Fauji Fertiliser Bin Qasim with 33.97 million shares, gaining Rs3.02 to close at Rs45.69 and Airlink Communication with 25.1 million shares, gaining Rs9.2 to close at Rs120.54.

Foreign investors bought shares worth a net Rs60.4 million, according to the NCCPL.