Stocks at historic peak near 89k

Investor interest driven by blue-chips, rate cut talk; KSE-100 index soars 1,751 points

KARACHI:

Pakistan Stock Exchange (PSX) on Thursday reached a historic milestone near 89,000 with a surge of around 1,750 points, which came on the back of increased investor interest in blue-chip shares and expectations of a deep policy rate reduction in the upcoming monetary policy announcement.

Investor optimism was further fuelled by improved corporate earnings in the ongoing results season and negotiations with China over the restructuring of energy sector debt.

The market advanced steadily for almost throughout the day and the KSE-100 index touched its intra-day high at 89,126.16 points well after midday.

"Stocks closed at an all-time high, led by blue-chip shares, amid speculation in the earnings season," remarked Ahsan Mehanti, Managing Director of Arif Habib Corp.

Surging global crude oil prices, the finance minister's affirmation of encouraging talks on Chinese energy debt, speculation about expected cut in the State Bank's policy rate and the government's deliberation on privatising state enterprises played the role of catalysts in bullish activity at the PSX, he added.

At the close of trading session, the benchmark KSE-100 index posted a remarkable surge of 1,751.45 points, or 2.01%, and settled at 88,945.99.

Topline Securities, in its report, commented that bulls dominated the PSX as the KSE-100 index surged to an all-time high of 89,126, up 1,931 points, or 2.22%, before closing at 88,946, higher by 2.01%.

Investor optimism was fuelled by expectations ahead of the monetary policy meeting scheduled for November 4. Market sentiment suggested that two significant policy rate cuts may be on the horizon, prompting a wave of stock buying that propelled the index to the historic peak, it said.

Also, investors were shifting their fixed income portfolios to equities, further boosting market momentum, Topline added.

Arif Habib Limited (AHL), in its report, mentioned that the KSE-100 index was in sight of 90,000, following a strong performance by blue-chip stocks.

Notable gainers during the day were Fauji Fertiliser Company (+6.7%), United Bank Limited (+5.33%) and Oil and Gas Development Company (+3.65%). On the other side, the largest drags were Systems Limited (-1.53%), Interloop Limited (-2.74%) and Mari Petroleum (-0.44%).

Maple Leaf Cement announced earnings per share (EPS) of Rs1.28 for the first quarter FY25, reflecting a decline of 17% year-on-year (YoY). "The decline in revenue is attributed to lower local dispatches, which decreased 16% YoY to 849,000 tons," it said.

Interloop Limited reported 1QFY25 EPS of Rs0.24, registering a sharp drop of 94% YoY, which was due to below-expected gross profit and higher effective tax rates.

Looking ahead, the State Bank's monetary policy committee is expected to meet on November 4, where another rate cut is expected. It would mark the fourth consecutive rate reduction since June 2024, AHL added.

JS Global analyst Mohammed Waqar Iqbal, in his report, wrote that the stock market closed at 88,946, up 1,751 points, with trading volumes reaching 758 million shares. A policy rate cut of 200 to 250 basis points was anticipated in the upcoming monetary policy, which was expected to drive the shift from fixed income to equities, he said.

The analyst added that investors would continue to focus on sectors such as exploration and production, fertiliser, cement and automobile.

Overall trading volumes increased to 757.6 million shares compared with Wednesday's tally of 699.3 million. The value of shares traded during the day was Rs36.05 billion.

Shares of 454 companies were traded. Of these, 238 stocks closed higher, 167 fell and 49 remained unchanged.

K-Electric was the volume leader with trading in 113.2 million shares, gaining Rs0.15 to close at Rs4.82. It was followed by Pakistan Telecommunication Company with 41.1 million shares, gaining Rs0.98 to close at Rs16.76 and Fauji Cement with 23.3 million shares, gaining Rs1.13 to close at Rs31.46.

During the day, foreign investors sold shares worth Rs2.68 billion, according to the NCCPL.