Stocks surge amid economic optimism

Index soars 836 points, but could not sustain record high levels

KARACHI:

Pakistan's stock market on Thursday enjoyed a highly positive activity, during which the KSE-100 index touched an all-time high of 94,290 points in intra-day trading.

According to analysts, the interest of investors could be attributed to the growing economic optimism, fuelled by reports that the International Monetary Fund (IMF) had no concerns about Pakistan's revenue collection targets. As a result, fears of an imminent mini-budget and new taxation measures eased.

Moreover, Pakistani banks secured a temporary relief from the Islamabad High Court against a government tax linked to the shortfall in private sector lending, adding to investor interest in the market. Ahsan Mehanti of Arif Habib Corp commented "stocks were at a new all-time high, led by blue chips on a strong earnings outlook."

Rupee stability, receding fears of a mini-budget and the government's assurance to the IMF about bridging the $5 billion external funding gap through a deferred Saudi oil payment facility and loan rollover by China Exim Bank played the role of catalysts in bullish close at the PSX, he added.

At the close of trading, the benchmark KSE-100 index recorded a surge of 836.47 points, or 0.90%, to 94,191.89.

Topline Securities, in its review, wrote that bulls were back in action as the KSE-100 index touched the intra-day high of 934 points and closed at 94,192, up 836 points.

As per news report, it said, Oil and Gas Development Company's (OGDC, +2.51%) cash collection ratio rose to 121% in 1QFY25, with the management expecting the trend to continue as the IMF programme may prompt timely gas price adjustments to meet revenue needs of Sui companies.

Moreover, investor interest surged in the banking sector following news that banks secured a temporary relief from the Islamabad High Court against a government tax linked to the shortfall in private sector lending. "This relief will remain in effect until a final decision is reached, with hearings scheduled to commence on December 3."

Topline mentioned that the index was boosted by contributions from United Bank Limited (UBL), OGDC, Habib Bank Limited (HBL), MCB Bank and TRG Pakistan, which collectively added 455 points. Trading activity remained strong, with 1.80 billion shares changing hands, generating total value of Rs32.6 billion, it added.

In its report, Arif Habib Limited (AHL) remarked that the PSX saw a higher displacement through the 92-94k range. Some 62 shares rose while 36 fell with UBL (+2.42%), OGDC (+2.51%) and HBL (+4.13%) being the biggest contributors to the index gains, it said.

Among corporate news, it pointed out, BF Biosciences' (+0.85%) "combi filling and lyophilisation lines" started commercial production, marking the commissioning of the full line-II expansion project.

"Going into the last session of the week, the KSE-100 is up 0.8% week-on-week and sitting above 94k, which can now help build support," AHL added.

JS Global analyst Mubashir Anis Naviwala wrote that increased confidence on the IMF front bolstered investor interest, lifting the index to 94,192 at close.

He suggested a buy-on-dips approach, especially in the exploration and production, pharmaceutical and fertiliser sectors, which showed a promising upside potential.

Overall trading volumes increased to 1.08 billion shares compared with Wednesday's tally of 807.1 million. The value of shares traded during the day was Rs32.7 billion.

Shares of 465 companies were traded. Of these, 262 stocks closed higher, 147 fell and 56 remained unchanged.

WorldCall Telecom was the volume leader with trading in 177.4 million shares, gaining Rs0.12 to close at Rs1.38. It was followed by Hascol Petroleum with 59.2 million shares, gaining Rs1 to close at Rs8.21 and Treet Battery with 47.9 million shares, gaining Rs1.34 to close at Rs15.81.

During the day, foreign investors sold shares worth a net Rs737.7 million, according to the NCCPL.