Led by local institutions, PSX soars to record
Foreign funds would divert their liquidity into buying Pakistan’s stocks. This would merely increases prices of shares and be profitable for those who already hold stocks. PHOTO: FILE
Pakistan Stock Exchange (PSX) on Wednesday soared to an all-time high at nearly 118,000 as it extended the winning streak, gaining over 950 points on the back of robust local institutional buying and potential resolution of the longstanding circular debt problem.
Heightening prospects of approval of the first International Monetary Fund (IMF) review under the $7 billion Extended Fund Facility boosted investor confidence. It will lead to the release of the second IMF loan tranche of over $1 billion.
Additionally, reports of clearing the outstanding dues of independent power producers (IPPs) eased concerns of the energy sector. Key sectors that saw strong buying were cement, commercial banks, oil and gas, fertiliser and power. They helped propel the index to the intra-day high of 118,244.
Arif Habib Corp MD Ahsan Mehanti wrote that stocks closed bullish amid speculation about the settlement of Rs1.5 trillion worth of circular debt in the power sector, following reports of IMF's conditional readiness to approve the government's circular debt management plan, under which Rs1.25 trillion would be raised through commercial banks.
Higher global crude oil prices and expectations of a reduction in the industrial power tariff played the role of catalysts in bullish close at the PSX, he added.
At the end of trading, the benchmark KSE-100 index posted an impressive rise of 972.94 points, or 0.83%, and settled at 117,974.03.
Topline Securities reported that the KSE-100 index hit the record high at 117,974, higher by 973 points. The market continued its upward momentum, fuelled by strong buying by local institutions, and peaked at 118,244 during the day.
The rally was primarily driven by Hub Power, Mari Petroleum, Engro Holdings, Systems Limited and Pakistan Petroleum, which together contributed 551 points to the index. On the other hand, Fauji Fertiliser Co, Engro Fertilisers and Pakistan Oilfields pulled the index down by 54 points.
Arif Habib Limited (AHL) stated that while continuing its rally towards January highs, the KSE-100 index reached close to 118,000.
A total of 57 shares rose, while 38 declined. Hubco (+4.8%), Mari Petroleum (+1.83%) and Systems Limited (+2.39%) were the top contributors to the index gains, it said. On the downside, Fauji Fertiliser Company (-0.21%), Engro Fertilisers (-0.39%) and Pakistan Oilfields (-0.59%) were the biggest drags. AHL pointed out that Wednesday's close above 117,900 was the highest on record, with the next target being the intra-day high of 118,700. It expected the upward momentum to gain pace as the market entered a vacuum.
JS Global analyst Muhammad Hasan Ather said that bulls continued to dominate the trading floor as the benchmark index managed to close higher for the fifth straight session at an all-time high of 117,974 (+973 points), mainly led by oil & gas, power and fertiliser sectors.
The continuation of bullish activities was primarily attributed to the likely resolution of the circular debt issue and approval of the IMF review, he said. Ather advised investors to adopt a "buy-on-dips" strategy and remained positive about the market.
KTrade Securities, in its market wrap, observed that the upward trajectory was driven by a better trading activity, progress on the IMF review and the reported release of IPPs' dues, coupled with hopes of a solution to the circular debt issue.
Power, oil and gas, cement and banking sectors led the increase in the KSE-100 index, where Hubco, Mari Petroleum, Engro Holdings, Systems Limited, Pakistan Petroleum and Lucky Cement were the top contributors, it said. Overall trading volumes increased to 544.2 million shares compared with Tuesday's tally of 449.5 million.
During the day, shares of 449 companies were traded. Of these, 221 stocks closed higher, 157 fell and 71 remained unchanged. The value of shares traded stood at Rs32.3 billion.
Pakistan International Bulk Terminal was the volume leader with trading in 52.2 million shares, gaining Rs0.39 to close at Rs11.05. It was followed by Pak Elektron with 36.1 million shares, rising Rs3.19 to close at Rs48.14 and WorldCall Telecom with 30.9 million shares, gaining Rs0.07 to close at Rs1.40. Foreign investors sold shares worth Rs963.9 million.