PSX extends bullish streak with 843-point rise

KSE-100 index climbs to 114,880, fuelled by expectations of rate cut

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KARACHI:

Pakistan Stock Exchange (PSX) on Friday extended its bullish trend as the KSE-100 index surged nearly 850 points over investor optimism fueled by expectations of a significant policy rate cut, ranging between 100 and 150 basis points, in the upcoming monetary policy meeting.

Major contributors to the rally were Fauji Fertiliser Company (FFC), Engro, Systems Limited, Engro Fertilisers, HBL, UBL and Sui Northern Gas Pipelines Limited (SNGPL), which collectively added 815 points to the index.

Trading volumes reached 632 million shares valuing at Rs38 billion, showcasing robust investor activity in anticipation of favourable economic policies.

"Stocks closed higher over a robust corporate earnings outlook," said Ahsan Mehanti of Arif Habib Corp.

Banking and fertiliser stocks outperformed because of likely strong payouts, the International Monetary Fund's (IMF) proposal of aligning gas tariffs for captive power plants with RLNG prices to ease circular debt and approval of a $20 billion Country Partnership Framework by the World Bank played the role of catalysts in further surge at the PSX.

At the close of trading, the benchmark KSE-100 index posted a rise of 842.70 points, or 0.74%, and settled at 114,880.49.

Topline Securities, in its market review, wrote that continuing its momentum, the KSE-100 index gained 843 points, which could be attributed to the monetary policy meeting on Monday next week, where a policy rate reduction in the range of 100 to 150 basis points was expected.

Traded value-wise, FFC (Rs3.4 billion), The Searle Company (Rs2.95 billion), Engro Holdings (Rs1.73 billion), DG Khan Cement (Rs1.03 billion), PSO (Rs954 million), SNGPL (Rs869 million) and Mari Petroleum (Rs862 million) dominated trading activity, Topline said.

Arif Habib Limited (AHL), in its report, said that it was a decent recovery for the KSE-100 index, which closed the week just below 115,000, limiting the week-on-week decline to 0.4%.

On Friday, 53 stocks rose while 44 fell. Key contributors to the index gains included FFC (+3.63%), Systems Limited (+2.69%) and Engro Fertilisers (+1.78%). Major drags were Mari Petroleum (-1.79%), OGDC (-0.69%) and Pakistan Petroleum (-0.49%), it said.

AHL pointed out that the State Bank of Pakistan's (SBP) foreign exchange reserves fell $276 million during the week ended January 17 and its total reserves reached $11.4 billion.

Looking ahead, according to AHL, the market's focus is on Monday's monetary policy committee meeting, where a 100-basis-point rate cut is anticipated. In the coming week, the KSE-100 is expected to surpass the 117,000 level, potentially leading to a retest of the all-time high.

Muhammad Hasan Ather of JS Global wrote that the benchmark index registered a robust rally as it surged 843 points. The rise was fueled by optimism surrounding a possible 100-basis-point rate cut in the upcoming monetary policy meeting, which could further support investor sentiment. Key sectors such as fertilisers and commercial banks saw substantial gains, he said.

Overall trading volumes were recorded at 632 million shares compared with previous day's tally of 676 million. The value of shares traded during the day was Rs37.8 billion.

Shares of 445 companies were traded. Of these, 226 stocks closed higher, 167 fell and 52 remained unchanged.

Cnergyico PK was the volume leader with trading in 61.5 million shares, losing Rs0.22 to close at Rs7.71. It was followed by Sui Southern Gas Company with 57.7 million shares, gaining Rs3.82 to close at Rs43.92 and WorldCall Telecom with 33.8 million shares, staying stable at Rs1.79.

During the day, foreign investors bought shares worth Rs277 million, according to the NCCPL.