Stocks rise on circular debt reduction
The Pakistan Stock Exchange (PSX) extended gains on Wednesday as it rose nearly 300 points over hopes of signing a Rs1.3 trillion financing facility by the government and banks to significantly reduce circular debt in the power sector.
Still, overall trading remained volatile as futures rollover pressure weighed on investor sentiment. There was some optimism following Prime Minister Shehbaz Sharif's efforts to secure monetary concessions from international lenders in the wake of recent floods.
The bourse maintained a steady upward trend for almost throughout the day. In intra-day trading, the index reached the high of 159,047 and low of 158,133.
At close, the benchmark KSE-100 index recorded an increase of 291.65 points, or 0.18%, at 158,236.68.
Arif Habib Limited (AHL), in its report, wrote that the KSE-100 posted minor gains in a largely flat session, reclaiming the 158k level. Some 46 shares rose while 53 fell with Pakistan Petroleum (+4.33%), Hub Power (+2.75%) and UBL (+0.91%) contributing the most to the index gains. However, Fauji Fertiliser (-0.79%), Systems Ltd (-1.32%) and Engro Fertilisers (-1.24%) were the biggest drags, it said.
Meanwhile, the KSE-100 index's profit (based on 93% of index weightage) increased 1.8% year-on-year in FY25 to Rs1.66 trillion. The increase came on the back of 205%, 119%, 43%, 41% and 39% growth in investment banks, pharmaceuticals, miscellaneous firms, cement companies and auto assemblers, respectively. Conversely, textile, chemical, power, exploration & production (E&P) and insurance sectors recorded a decrease of 55%, 41%, 40%, 20% and 2%, respectively. AHL said the upside target of 159.3k remains valid.
JS Global analyst Mubashir Anis Naviwala remarked that the bourse opened with a strong momentum, attempting to stay above the 159,000 level. However, the resistance proved firm as the index slipped to the intra-day low of 158,133. Despite the pullback, the market closed in the green with gains of 292 points.
Volumes were heavily dominated by K-Electric, which saw trading in 659 million shares. He advised investors to stay selective and focus on opportunities in cement, banking and E&P sectors.
Topline Securities observed that the local bourse opened on a strong note, where bulls marched confidently as the benchmark index surged to the intra-day high of 1,101 points. The rally was fuelled by news that the government was set to ink a landmark Rs1.275 trillion financing facility with 18 commercial banks, aimed at tackling the crippling circular debt in the power sector.
However, as the session progressed, investors opted to lock in profits, tempering the momentum. The index ultimately settled at 158,237, posting a modest gain of 292 points (+0.18%), it said.
Adding to the buzz, K-Electric stole the spotlight, which recorded its highest-ever trading volumes, following improved financial results and investor belief that earnings may strengthen further.
Pakistan Petroleum, Hub Power, United Bank and K-Electric collectively contributed 538 points to the index, while Fauji Fertiliser, Systems Ltd, Engro Fertilisers and Meeezan Bank dragged the index down by 256 points, Topline said.
KTrade Securities reported that stocks experienced another volatile session, primarily driven by futures rollover and profit-taking. Despite fluctuations, the KSE-100 index managed to add another 292 points, closing at 158,237. Overall trading volumes increased to 1.8 billion shares compared with Tuesday's tally of 1.5 billion. The value of shares traded was Rs54.5 billion.
Shares of 484 companies were traded. Of these, 194 stocks closed higher, 252 dropped and 38 remained unchanged.
K-Electric continued to lead the volumes with trading in 659.2 million shares, rising Rs0.81 to close at Rs7.12. It was followed by Cnergyico PK with 96.4 million shares, gaining Rs0.11 to close at Rs8.61 and Pakistan International Bulk Terminal with 68.3 million shares, up Rs0.36 to close at Rs14.40. Foreign investors sold shares worth Rs982 million, the National Clearing Company reported.