PSX opens rollover week on turbulent note

The Pakistan Stock Exchange (PSX) opened the rollover week on a turbulent note on Monday as profit-taking and cautious sentiment drove the benchmark KSE-100 index from the intra-day high of 586 points to the low of 735 points. It closed the day at 148,815.31, representing a decrease of 677.75 points, or 0.45%.

Analysts attributed the bearish close to institutional selling pressure in an overbought market, foreign outflows and uncertainty surrounding the International Monetary Fund's (IMF) next review for the release of third tranche under the Extended Fund Facility (EFF). Banking and cement stocks weighed on the index's performance.

According to Ahsan Mehanti of Arif Habib Corp, stocks closed bearish amid institutional profit-taking in an overbought market. Flat government bond yields, foreign outflows, concerns over external debt, state-owned companies' losses and uncertainty about the outcome of next IMF review for the release of third loan tranche amid unmet conditions for provincial tax collection were the factors that drove the PSX to a negative close, he said.

In its market review, Topline Securities commented that the local bourse kicked off the rollover week on a volatile note, with a glimpse of profit-taking weighing on sentiment. The benchmark index oscillated sharply, hitting the intra-day high of 586 points before slipping to the low of 735 points. It eventually closed at 148,815, down 678 points, or 0.45%, as investors booked gains amid cautious trading.

Among individual stocks, Bank Alfalah, the National Bank of Pakistan (NBP), The Searle Company and Pakistan Aluminium Beverage Cans lent support with a cumulative contribution of +92 points. However, losses in Bank AL Habib, Systems Limited, Meezan Bank, Habib Bank Limited (HBL) and Lucky Cement dragged the index lower by 394 points, it said.

In terms of traded value, NBP (Rs2.15 billion), The Searle Company (Rs2.06 billion), Pakistan State Oil (Rs1.26 billion), Oil and Gas Development Company (Rs665.43 million) and Meezan Bank (Rs592.27 million) dominated the board, the brokerage house noted.

In its commentary, Arif Habib Limited (AHL) remarked that Monday saw the KSE-100 start to dig into the support level, which extends down to 148,000 points. Some 35 shares rose while 63 fell, where Bank Alfalah (+1.68%), NBP (+0.76%) and Searle (+1.81%) contributed the most to index gains. On the flip side, Bank AL Habib (-2.02%), Systems Ltd (-2.02%) and Meezan Bank (-1.43%) were the biggest drags.

AHL pointed out that the government had given investors access to the data room of Pakistan International Airlines (PIA) with rebidding expected in October. Additionally, Pakistan and Bangladesh vowed to ramp up efforts to increase trade, investment and connectivity as well as lift visa restrictions for diplomats and government officials.

JS Global analyst Muhammad Hasan Ather observed that the KSE-100 closed down by 678 points amid profit-taking after a record-breaking rally. Investors booked gains following a surge from 40,000 points in mid-2023 to an all-time intra-day high of 151,261.

With the market now trading at a price-to-earnings ratio of approximately 8.4x – near its historical average – further upside appears limited without fresh economic catalysts, Ather projected.

Overall trading volumes decreased to 693.3 million shares compared with Friday's tally of 802 million. Traded value fell to Rs26.3 billion as compared to Rs40.5 billion in the previous session.

Shares of 479 companies were traded. Of these, 204 stocks closed higher, 246 dropped and 29 remained unchanged.

Kohinoor Spinning Mills was the volume leader with trading in 113.9 million shares, gaining Rs0.59 to close at Rs7.07. It was followed by Secure Logistics with 32.6 million shares, gaining Rs0.63 to close at Rs18.42 and Sui Southern Gas Co with 27.1 million shares, gaining Rs1.71 to close at Rs42.27. Foreign investors sold shares worth Rs378 million, the National Clearing Company reported.