Bulls dominate PSX over financing hopes

KSE-100 index gains 356.88 points, settles at 78,349.66

KARACHI:

Despite exhibiting significant volatility, the Pakistan Stock Exchange (PSX) on Thursday notched up notable gains, powered by positive triggers such as falling bond yields and optimism about bridging the external financing gap.

Those factors, coupled with impending approval of the $7 billion Extended Fund Facility (EFF) by the International Monetary Fund (IMF) executive board, supported the bourse in maintaining its bullish momentum.

Moody's ratings upgrade for Pakistan to Caa2 and a positive outlook on reduced default risk, announced a day ago, aided the market's advance.

In the morning, trading kicked off on a bullish tone, with the KSE-100 index reaching its intra-day high of 78,513.86 points very soon. Heavyweights sectors including automobile, power, banking and fertiliser mainly contributed to the gains.

There was some profit-taking later in the day, but the index recovered again and closed with significant gains.

"Stocks closed bullish on Moody's ratings upgrade to Caa2 and a positive outlook on reduced default risk," said Ahsan Mehanti, MD of Arif Habib Corp.

"Falling bond yields and greater certainty about Pakistan's external financing, ahead of the IMF board approval of the $7 billion EFF, were the major catalysts for the bullish close at the PSX," he said.

At the end of trading, the benchmark KSE-100 index recorded an increase of 356.88 points, or 0.46%, and settled at 78,349.66.

Topline Securities, in its report, noted that the bourse surged by 357 points and ended the day at 78,350. The index exhibited notable volatility, reaching a peak of 78,514 and dipping to 78,017 during the session, it said.

The rally was fuelled by significant gains in heavyweights such as Millat Tractors, Engro Corporation, National Bank of Pakistan (NBP), Colgate-Palmolive and Hub Power, which contributed 427 points to the index, Topline added.

Arif Habib Limited (AHL), in its commentary, wrote that the KSE-100 continued to form a bottom around 78,000.

During the day, 44 stocks rose while 55 fell with Millat Tractors (+9.62%), Engro Corp (+4.05%) and NBP (+8.14%) being the biggest contributors to the index gains. Meezan Bank (-1.02%), Systems Limited (-1.47%) and Engro Fertilisers (-0.9%) were the largest drags, it said.

In a major development, NBP reported an extraordinary amount of Rs49 billion related to the settlement of a pension case for the second quarter of 2024. "This translates into a per-share impact of Rs12 [after tax]."

JS Global analyst Mohammed Waqar Iqbal stated that positive activity was observed at the PSX as investors took the benefit of attractive valuations. Resultantly, the KSE-100 gained 357 points day-on-day.

Though there were not any triggers in the foreseeable future, which could keep the market in a consolidation phase, positive news about the IMF programme could invite fresh buying, the analyst added.

Overall trading volumes decreased to 599.8 million shares compared with Wednesday's tally of 636.02 million. The value of shares traded during the day was Rs20.4 billion.

Shares of 449 companies were traded. Of these, 227 stocks closed higher, 166 fell and 56 remained unchanged.

Symmetry Group was the volume leader with trading in 64.3 million shares, gaining Re1 to close at Rs8.57. It was followed by NBP with 42.6 million shares, gaining Rs4.73 to close at Rs57.53 and Kohinoor Spinning Mills with 41.1 million shares, gaining Rs0.25 to close at Rs11.69. Foreign investors were net buyers of shares worth Rs122.8 million, according to the NCCPL.