Stocks rebound, soar to record above 110k

Index jumps 1,914 points amid rate cut hopes, robust local buying

KARACHI:

Following a brief pause, the Pakistan Stock Exchange (PSX) on Wednesday saw a resurgence in investor interest as the KSE-100 index rebounded sharply and rose over 1,900 points to a new record high.

Market optimism was fuelled by expectations of a policy rate reduction in the monetary policy committee meeting on December 16, after a significant drop in inflation to 4.9%, its lowest in over six years.

Trading activity quickly picked up momentum following the market's opening and reached the intra-day peak at 111,012.02. The buoyancy was fuelled by positive economic developments, notably the discussion on the advances-to-deposit ratio (ADR) for banks.

Investors also weighed upbeat car sales, which surged 62% year-on-year (YoY) in November. AKD Securities' Investment Analyst Osama Naeem attributed the growth to the resurgence in passenger car sales.

According to Arif Habib Corp MD Ahsan Mehanti, stocks closed bullish, where the momentum was led by across-the-board activity as investors weighed the upbeat car sales and the recent cut in National Saving Schemes' (NSS) rates, triggering speculation about a significant monetary policy easing.

Robust economic indicators, surging global crude oil prices and the recovery in global equities on receding geopolitical tensions acted as catalysts in the new record close at the PSX, he added.

At the end of trading, the benchmark KSE-100 index posted handsome gains of 1,913.57 points, or 1.76%, to 110,810.22.

Topline Securities mentioned in its review that the KSE-100 surged to a historic high of 110,810. The market maintained its upward trajectory, supported by strong buying from local institutions, during which the index reached the intra-day peak of 111,012.

Key contributors to the index's rise were Mari Petroleum, Pakistan Petroleum, Oil and Gas Development Company, Dawood Hercules Corporation and United Bank, which added 1,002 points.

Trading activity remained robust, with a total volume of 1.08 billion shares and traded value of Rs47 billion, Topline added.

Arif Habib Limited (AHL) wrote in its report that stocks showed a strong recovery following Tuesday's decline, with the KSE-100 index gaining 1.76% day-on-day.

A total of 72 shares rose while 27 declined, with Mari Petroleum (+5.66%), Pakistan Petroleum (+6.51%) and Oil and Gas Development Company (+5.72%) leading the gains.

On the other hand, Mehmood Textile Mills (-9.51%), The Searle Company (-4.11%) and Habib Metropolitan Bank (-2.02%) were the largest drags on the index, it said.

In a key development, the ADB approved $530 million in loans for projects aimed at reducing energy losses and strengthening social development programmes. Additionally, Pakistan was in talks with the IMF for climate change funding.

The market continues to show the upward momentum, holding support at 107k, AHL added.

JS Global analyst Muhammad Hasan Ather said in his commentary that the KSE-100 staged a significant recovery, closing at 110,810, up 1,914 points. It marked a strong rebound after profit-taking the previous day.

The rally was supported by increased local buying, led by mutual funds. Investors are encouraged by the falling inflation rate and expectations about the upcoming Special Investment Facilitation Council (SIFC) meeting, Ather added.

Overall trading volumes decreased to 1.08 billion shares against Tuesday's tally of 1.55 billion. The value of shares traded during the day was Rs47.1 billion.

Shares of 472 companies were traded. Of these, 288 stocks closed higher, 130 fell and 54 remained unchanged.

K-Electric was the volume leader with trading in 135.9 million shares, gaining Rs0.49 to close at Rs6.40. It was followed by WorldCall Telecom with trading in 73.5 million shares, losing Rs0.01 to close at Rs1.65 and Fauji Foods with 57.1 million shares, gaining Rs1.2 to close at Rs14.90.

During the day, foreign investors sold shares worth Rs21.2 million, the NCCPL reported.