Stocks surge following constitutional changes
Pakistan Stock Exchange (PSX) on Monday staged a remarkable recovery, fueled by encouraging economic indicators and some degree of political stability.
The KSE-100 index surged past 86,000 with gains of over 800 points, reflecting investor optimism and confidence. The surge was driven by across-the-board buying following approval of constitutional amendments by the National Assembly (NA). Earlier, the bourse began the session with a strong buying spree that persisted throughout the day, leading to a notable recovery across various sectors. As a result, the index advanced to the intra-day high of 86,172.79 points towards the close of trading.
At a gong ringing ceremony, the PSX marked the listing of BF Biosciences, a pharmaceutical joint venture between Ferozsons Laboratories and Bago Group of Argentina. On the economic front, Pakistan posted a current account surplus of $119 million for September 2024, the highest since April 2024.
"Stocks showed a sharp recovery in early session, led by across-the-board buying, after the NA passed constitutional amendments, ending political uncertainty," said Ahsan Mehanti, Managing Director of Arif Habib Corp.
"Speculation surrounding the earnings season and easing lending rates also acted as catalysts for bullish activity at the PSX," he noted.
At the close of trading, the benchmark KSE-100 index posted impressive gains of 807.42 points, or 0.95%, and settled at 86,057.52.
Topline Securities, in its report, mentioned that the session exhibited positive momentum following easing of political uncertainty, highlighted by the Senate's approval of the 26th Constitutional Amendment Bill 2024, which was passed with a two-thirds majority on Sunday evening. Subsequently, the NA ratified the legislation. Key contributors to the KSE-100 index were Millat Tractors, United Bank Limited, Attock Refinery, Hub Power and Pakistan Oilfields, which collectively added 274 points, said Topline. Arif Habib Limited (AHL), in its review, wrote that stocks saw a strong trading session with the KSE-100 gaining 0.95% following approval of changes in the constitution early Monday morning. It demonstrated the strength of parliament as it slashed powers of the judiciary to some extent.
Millat Tractors (+5.22%), UBL (+1.32%), and Attock Refinery (+10%) were the biggest contributors to the index gains.
Meezan Bank reported earnings per share (EPS) of Rs43.42 for nine months of calendar year 2024, reflecting a 33% year-on-year increase, with dividend per share of Rs21, which was in line with expectations, added AHL.
JS Global analyst Mohammed Waqar Iqbal noted that following the Senate's ratification of the 26th Constitutional Amendment Bill, political stability boosted the market's momentum. With several key announcements expected during the current week, corporate earnings would remain the central focus, he said.
During the day, auto stocks appeared attractive, driven by a modest recovery in volumes and an uptick in auto financing, the analyst added.
Overall trading volumes increased to 474.9 million shares compared with Friday's tally of 323.9 million. The value of shares traded during the day was Rs19.7 billion.
Shares of 445 companies were traded. Of these, 269 stocks closed higher, 124 fell and 52 remained unchanged.
Kohinoor Spinning Mills was the volume leader with trading in 59.1 million shares, gaining Rs0.94 to close at Rs8.18. It was followed by Pakistan International Bulk Terminal with 27.9 million shares, gaining Rs0.41 to close at Rs7.05 and Flying Cement with 18.5 million shares, gaining Rs1.79 to close at Rs19.80. Foreign investors sold shares worth Rs204.3 million, according to the NCCPL.