PSX surges past 109k to fresh record
Pakistan Stock Exchange (PSX) maintained on Friday its bullish momentum with a further increase of over 800 points to a new record high above 109,000.
The rally was driven by investors' buying of select oil and banking-sector stocks ahead of the State Bank of Pakistan's (SBP) policy rate announcement next week.
The finance minister's assurance to cover the slippages in the International Monetary Fund (IMF) targets under the $7 billion Extended Fund Facility (EFF) also bolstered investor confidence.
Saudi Arabia's $3 billion deposit rollover stabilised the rupee and supported Pakistan's foreign exchange reserves, strengthening market sentiment.
The KSE-100 index posted its seventh consecutive weekly gain with a surge of over 7% week-on-week (WoW).
"Stocks were bullish, led by selective shares of oil and banking sectors, amid speculation ahead of the SBP's policy rate announcement next week and finance minister's assurance to cover slippages in the IMF targets before the EFF review," said Arif Habib Corp Managing Director Ahsan Mehanti.
"Saudi fund's $3 billion deposit rollover, which supported forex reserves, rupee stability and upbeat economic indicators played the role of catalysts in the new record close at the PSX," he said.
At the end of trading, the benchmark KSE-100 index posted an impressive rise of 814.98 points, or 0.75%, and settled at 109,053.95.
Topline Securities, in its market review, commented that the KSE-100 index, while continuing its momentum, extended gains by 815 points and closed at 109,054.
"This increase can be attributed to news that Saudi Arabia has agreed to extend its $3 billion deposit with the State Bank of Pakistan for another year, offering essential assistance to Pakistan's foreign exchange reserves," it said.
A robust activity was observed at the bourse, largely led by intuitional buying, as traded volume and value stood at 1.7 billion shares and Rs57 billion ($205 million), respectively.
In terms of traded value, United Bank Limited (Rs5.09 billion), Mari Petroleum (Rs2.3 billion), Engro Corporation (Rs2.25 billion), The Searle Company (Rs2.08 billion) and Pak Elektron (Rs2.05 billion) dominated the activity, Topline added.
In its weekly review, the research house wrote that the KSE-100 rose 7.6% WoW, the highest weekly gain after April 3, 2024. "This gain can be attributed to persistent buying by mutual funds on account of more allocation towards equity in the backdrop of declining yields on fixed-income securities as inflation numbers continue to fall."
Arif Habib Limited (AHL) wrote in its report that the KSE-100 index surged more than 7% WoW, marking its seventh consecutive weekly gain.
On Friday, 48 shares recorded gains while 51 declined. Key contributors to the index's upward movement were Engro Corporation (+9.17%), United Bank Limited (+4.18%) and Meezan Bank (+4.41%), it said. The biggest drags were Hub Power (-2.03%), Systems Limited (-1.74%) and Oil and Gas Development Company (-1.33%).
AHL pointed out that Engro Corp had entered into an amalgamation agreement with Pakistan Mobile Communications Limited (Jazz). Under the agreement, its wholly owned subsidiary Deodar Limited will be merged into Engro Connect, which is a 100% subsidiary of Engro Corp.
As per the agreement's terms, Engro will undertake the repayment of Deodar's debt amounting to $375 million (Rs104 billion), along with an additional payment of $187.7 million (Rs52 billion), to Jazz.
While the current momentum in the market remains very strong, there is a significant risk of a sharp correction in the coming weeks. The market appears overstretched when compared to its historical performance, warranting caution among investors, AHL added.
Overall trading volumes increased to 1.7 billion shares compared with Thursday's tally of 1.6 billion. The value of shares traded during the day was Rs57.5 billion.
Shares of 468 companies were traded. Of these, 233 stocks closed higher, 200 fell and 35 remained unchanged.
WorldCall Telecom was the volume leader with trading in 368.9 million shares, gaining Rs0.16 to close at Rs1.75. It was followed by The Bank of Punjab with 115.6 million shares, gaining Rs0.75 to close at Rs10.84 and Cnergyico PK with 93.6 million shares, staying stable at Rs6.87.
During the day, foreign investors were sellers of shares worth Rs557.7 million, according to the NCCPL.