PSX soars by record 4,411 points

Bulls take charge amid renewed optimism following last week's volatility

KARACHI:

Pakistan Stock Exchange (PSX) on Monday boasted a highly bullish rally, where the KSE-100 index surged by a massive 4,411 points, attributed to falling government bond yields, declining lending rates, and easing political tensions, particularly the ongoing talks between the government and the opposition.

Analysts also cited strong economic indicators such as rising exports, remittances, and foreign exchange reserves as key drivers behind the rally.

Stock buying took place across the board, particularly in major sectors including oil and gas, fertiliser and power. They contributed to the market's recovery, which experienced volatility last week.

The day's trading was marked by robust activity, with a total traded volume of 858 million shares and traded value of Rs50 billion.

Ahsan Mehanti of Arif Habib Corp commented that stocks closed bullish, led by across-the-board activity, as investors weighed falling lending rates after a decline in government bond yields.

Easing political noise as well as patch-up talks between the government and Pakistan Tehreek-e-Insaf (PTI) played a pivotal role in the bullish momentum, he noted.

Mehanti added that upbeat economic indicators including surging exports, remittances, and foreign exchange reserves were among major catalysts for the record surge at the PSX.

At the end of trading, the benchmark KSE-100 index recorded a remarkable rise of 4,411.27 points, or 4.03%, and settled at 113,924.42.

In its review, Topline Securities commented that the benchmark index saw a notable increase as the market continued its recovery following last week's losses, driven by speculation that selling by local funds had subsided.

It said that key contributors to the upward movement were Oil and Gas Development Company, Engro Corporation, Fauji Fertiliser Company, Pakistan State Oil and Dawood Hercules Corporation, which together added 1,554 points to the index.

Trading remained active, with a total volume of 858 million shares and total value of Rs50 billion. WorldCall Telecom topped the volume charts, with 71 million shares changing hands, Topline added.

In its report, Arif Habib Limited (AHL) noted that the week started on a strong note as 90 shares rose and nine fell. Oil and Gas Development Company (+8.35%), Engro Corporation (+10%) and Fauji Fertiliser Company (+3.62%) contributed the most to index gains.

On the other hand, Mehmood Textile Mills (-5.31%), Cherat Cement (-1.94%) and Pakistan Services (-2%) were the biggest index drags, it said.

Additionally, AHL pointed mentioned, TRG Pakistan (+10%) and Reliance Cotton Spinning Mills (+10%) signed pacts to manufacture, assemble and sell Samsung products and home appliances in Pakistan. Separately, Greentree Holdings plans to acquire a 35.14% stake in TRG Pakistan (+10%) subject to regulatory approvals. The planned acquisition will include a public offer of 50% of free float shares.

"If this is indeed a counter-trend rally, the index is now in an area from where it should struggle to hold these levels," AHL commented.

JS Global analyst Muhammad Hasan Ather stated that the index's surge was driven by buying across the board in key sectors. The recent bull-run was fuelled by the central bank's decision to cut its policy rate by 200 basis points to 13%, boosting investor confidence, he said.

Additionally, the ongoing talks between the government and the opposition instilled optimism among investors, contributing to the market's upward momentum.

The JS analyst commented that the positive sentiment was expected to continue, supported by strong economic indicators and favourable market conditions, offering a promising outlook for investors.

Overall trading volumes increased to 857.8 million shares compared to Friday's tally of 754.9 million.

Shares of 463 companies were traded. Of these, 361 stocks closed higher, 62 fell and 40 remained unchanged.

WorldCall Telecom was the volume leader with trading in 71.1 million shares, gaining Rs0.12 to close at Rs1.72. It was followed by Cnergyico PK with 66.5 million shares, gaining Rs0.88 to close at Rs6.79 and Pak Elektron with 38.7 million shares, gaining Rs1.94 to close at Rs40.73.

During the day, foreign investors sold shares worth Rs704.4 million, the National Clearing Company of Pakistan reported.