Successful SCO summit takes PSX to record

Pakistan Stock Exchange (PSX) on Wednesday reached a new record high as it rose over 350 points in an earnings season rally, triggered by easing political noise and speculation about economic commitments at the Shanghai Cooperation Organisation (SCO) summit.

In the morning, trading kicked off on a robust note, building on the previous session's momentum with several positive triggers in play. The successful SCO summit, coupled with robust corporate earnings, sparked a broad-based rally across multiple sectors.

Additionally, power sector stocks surged after the government announced payments to independent power producers (IPPs) and proposed new "take-and-pay" options for 18 IPPs. As a result, the KSE-100 index crossed the 86,000 mark and reached its intra-day high of 86,513.46 points. Despite a brief dip to the intra-day low of 85,948.05 points later in the afternoon, the market rebounded and closed with notable gains above the key 86,000 level.

"Stocks closed at a record high in an earnings season rally as investors weighed the easing political noise and speculation about economic commitments at the SCO summit," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

"A slump in bond yields and government deliberations on the privatisation of state-owned enterprises played the role of catalysts in bullish activity at the PSX." At the close of trading, the KSE-100 index registered a rise of 365.32 points, or 0.43%, and settled at 86,205.66.

Topline Securities, in its commentary, noted that the KSE-100 index soared to a record-breaking 86,205 points, fuelled by investor optimism following the successful SCO summit. "The summit heightened expectations of regional political and economic stability, strengthening market confidence. This positive sentiment, combined with robust corporate earnings, ignited a broad-based rally across multiple sectors," it said.

Lalpir Power, Nishat Power and Nishat Chunian Power hit their upper circuits after news broke that the government would release the outstanding amount and proposed four "take-and-pay" options for 18 IPPs established under the Power Generation Policies of 1994 and 2002.

"This development further lifted sentiment in the power sector and added momentum to the market's rally."

Major contributors to the index were Pakistan Petroleum, Hub Power, Pakistan State Oil, Oil and Gas Development Company and The Searle Company, which collectively added 368 points, Topline added. Arif Habib Limited (AHL), in its report, stated that old highs were tested in intra-day trading but the KSE-100 was restricted below by the end of the session.

Some 60 shares rose while 37 fell with Hub Power (+2.93%), Pakistan State Oil (+5.38%) and The Searle Company (+9.12%) making the biggest contribution to the index gains, it said, adding that Habib Bank (-1.76%) reported 9MCY24 earnings per share of Rs30.03, up 3% year-on-year and dividend per share of Rs12.

JS Global analyst Mohammed Waqar Iqbal commented that with other important corporate results due in the current week, the earnings season was expected to provide further support for the market's upward momentum. "Additionally, the upcoming monetary policy meeting is expected to keep investor interest intact. In the short term, the market outlook remains positive," the analyst added.

Overall trading volumes increased to 474.3 million shares compared with Tuesday's tally of 422.1 million. The value of shares traded during the day was Rs26.9 billion. Shares of 445 companies were traded. Of these, 227 stocks closed higher, 150 declined and 68 remained unchanged.

The Searle Company was the volume leader with trading in 26.01 million shares, gaining Rs5.29 to close at Rs63.32. It was followed by Hub Power with 24.3 million shares, gaining Rs2.9 to close at Rs101.73 and Hum Network with 22.6 million shares, gaining Rs0.14 to close at Rs14.24.

During the day, foreign investors sold shares worth Rs87.65 million, according to the NCCPL.