Stocks recover after two-day slide

Index gains 928 points over export growth, lower bond yields

Listen to article

KARACHI:

After a two-day sell-off, the Pakistan Stock Exchange (PSX) showed recovery on Friday, bolstered by a strong earnings outlook, a resilient rupee, and rising exports.

The KSE-100 index closed above 111,000, gaining 928 points, or 0.8%, as investors responded positively to key economic indicators and falling government bond yields amid subdued inflation.

"Stocks showed recovery near year-end on a strong earnings outlook," said Arif Habib Corp Managing Director Ahsan Mehanti.

Strong rupee, reports of surging exports, higher global crude oil prices and falling government bond yields amid thin inflation played the role of catalysts in bullish close at the PSX, he added.

At the end of trading, the benchmark KSE-100 index posted a rise of 927.86 points, or 0.84%, and settled at 111,351.18.

In its research report, AHL noted that the market recovered after a two-day sell-off, closing 1.4% higher week-on-week.

The session saw an increase in 67 shares while 32 declined, with TRG Pakistan (+2.49%), Meezan Bank (+3.99%) and Pakistan State Oil (+2.06%) contributing significantly to the index gains. Conversely, United Bank Limited (-0.39%), Systems Limited (-0.57%) and Pakistan GasPort Consortium (-3.95%) were the biggest drags.

Additionally, the National Bank of Pakistan (+1.43%) announced that the US Federal Reserve had terminated its enforcement action against the bank. "Despite these developments, the KSE-100 index remains range bound and lacks clear direction," AHL said.

Topline Securities, in its market review, wrote that a recovery was observed at the stock exchange where the KSE-100 index largely traded in the positive zone.

Traded value-wise, TRG Pakistan (Rs2.92 billion), Mari Petroleum (Rs2 billion), PSO (Rs1.77 billion), OGDC (Rs1.28 billion) and Meezan Bank (Rs835 million) dominated trading activity.

Top contribution to the index came from Mari Petroleum, Meezan Bank, PSO, Bank Alfalah and TRG, as they cumulatively added 416 points, it said.

TRG again remained in the limelight, as disclosure with respect to Greentree Holdings' (substantial shareholder) intention to buy up to 35.145% stake in TRG Pakistan garnered investor interest.

Traded volume and value for the day stood at 816 million shares and Rs32.9 billion ($118 million), respectively, Topline added.

JS Global analyst Muhammad Hasan Ather said that the KSE-100 saw a significant recovery, with the benchmark index rising by 0.8% (928 points) to close at 111,351.

The rally was driven by renewed investor confidence and fresh buying after a period of heavy selling. The key economic updates, including a substantial tax gap disclosure and improved foreign exchange reserves, boosted sentiment, he said.

With a notable increase in exports and foreign direct investment, the market's outlook remained positive, suggesting the potential for continued growth and stability, the JS analyst added.

Overall trading volumes were recorded at 816 million shares compared with Thursday's tally of 628 million. The value of shares traded during the day was Rs33 billion.

Shares of 443 companies were traded. Of these, 223 stocks closed higher, 176 fell and 44 remained unchanged.

Fauji Foods was the volume leader with trading in 104 million shares, gaining Rs0.69 to close at Rs17.08. It was followed by WorldCall Telecom with 74 million shares, losing Rs0.01 to close at Rs1.71 and Cnergyico PK with 40 million shares, gaining Rs0.23 to close at Rs6.52.

During the day, foreign investors sold shares worth Rs603 million, according to the NCCPL.