PSX at peak amid 18-year high trading value

Market surge driven by falling inflation, lower deficit, export growth

KARACHI:

Pakistan Stock Exchange (PSX) extended on Tuesday its record-breaking spree as it soared to a fresh peak while traded value reached its highest level in 18 years at Rs57 billion.

The KSE-100 index surged 1,406 points in intra-day trading, briefly touching the unprecedented high of 104,681, before closing at 104,559, up an impressive 1,284 points.

The bullish momentum could be attributed to heightened investor optimism over a potential rate cut in the upcoming monetary policy meeting as well as the fall in inflation to the lowest level in six years. Additionally, positive economic indicators such as the falling trade deficit and growing exports fuelled optimism. Market participation touched the high of 1.77 billion shares, where the most actively traded stocks were Cynergyico PK, WorldCall Telecom and Hascol Petroleum.

Ahsan Mehanti of Arif Habib Corp commented that bullish activity was driven by across-the-board trading in stocks as investors eyed a big policy rate cut next week after inflation fell to a six-year low.

He added that upbeat data showing a $8.65 billion trade deficit, down 7.4%, export growth of 12.57% to $13.69 billion for July-November and rupee stability played the role of catalysts in record surge at the PSX. At the end of trading, the benchmark KSE-100 index recorded an increase of 1,284.13 points, or 1.24%, to 104,559.07.

Topline Securities cited in its market review that bulls firmly took charge as the KSE-100 soared, reaching remarkable new milestones. The trade value in the ready market climbed to an impressive Rs57 billion ($203 million), marking the highest level in 18 years, it said.

"This bullish momentum is largely attributed to heightened investor optimism surrounding a potential big rate cut in the upcoming monetary policy meeting scheduled for December 16."

Topline said that Pakistan's trade deficit for November contracted 19% year-on-year to $1.59 billion, supported by a rise in exports and a decline in imports, adding to the positive sentiment. "This improvement has bolstered expectations of a robust current account surplus, further uplifting market confidence."

It added that key drivers of the rally included heavyweights such as Engro Corporation, Mari Petroleum, Pakistan Oilfields, Fauji Fertiliser Company and Dawood Hercules Corporation, collectively contributing 658 points to the index.

In its report, AHL commented that another 1% day-on-day gain moved the index towards 105,000 points. Some 69 shares rose while 28 fell with Engro Corporation (+6.14%), Mari Petroleum (+4.21%) and Pakistan Oilfields (+4.7%) being the biggest upside contributors.

On the other hand, Habib Bank (-2.3%), Systems Limited (-1.01%) and Meezan Bank (-0.81%) were the largest index drags.

Notable performers were Pak Elektron (+10%), Airlink Communication (+8.95%), Pakistan Refinery (+9.73%) and Sui Southern Gas Company (+9.69%), AHL said.

It noted that while the PSX was again entering the overstretched territory, the momentum remained very strong and further gains should be expected against support at 100,000 points.

JS Global analyst Mubashir Anis Naviwala wrote that the KSE-100 surged 1.24%, after recovering from an early dip to 102,825.59 points.

With expectations of stronger earnings growth, investor optimism was fuelled by hopes of continued monetary easing by the State Bank, with inflation data signalling potential rate cuts. With such favourable developments, the market outlook looked strong, the analyst said.

Overall trading volumes increased to 1.8 billion shares against Monday's tally of 1.6 billion. The value of shares traded during the day was Rs56.6 billion.

Shares of 465 companies were traded. Of these, 271 stocks closed higher, 160 fell and 34 remained unchanged.

Cnergyico PK was the volume leader with trading in 246.7 million shares, increasing Rs1 to close at Rs6.72. It was followed by WorldCall Telecom with trading in 89.4 million shares, gaining Rs0.01 to close at Rs1.47 and Hascol Petroleum with 87 million shares, gaining Rs1.19 to close at Rs14.68.

During the day, foreign investors sold shares worth Rs652 million, according to the NCCPL.