PSX jumps 2,474 points on political stability
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
The Pakistan Stock Exchange (PSX) extended gains on Thursday, when the benchmark KSE-100 index surged 2,474 points, or 1.56%, as the passage of 27th Constitutional Amendment and the expected release of International Monetary Fund's (IMF) loan tranche sparked investor interest.
Trading remained robust for almost throughout the session, during which the index touched the intra-day high of 160,945 and low of 158,971. The upbeat sentiment reflected renewed investor confidence driven by political stability, improved security conditions and a calmer regional outlook. The rally was led by cement, fertiliser and oil & gas sectors.
KTrade Securities equity trader Ahmed Sheraz commented that PSX saw a strong reversal of fortunes as the KSE-100 index surged 2,474 points to close at 160,657.5. The rally was broad-based with major sectors including cement, fertiliser and oil & gas recording significant gains.
He said that market sentiment improved on the back of multiple positive developments. The passage of the 27th Constitutional Amendment was viewed as a step towards political stability. Confidence was further strengthened after the Sri Lankan cricket team decided to continue its tour of Pakistan following security assurances.
Additionally, a successful operation in Khyber-Pakhtunkhwa and the Indian cabinet's statement on Delhi explosion, which did not mention Pakistan, supported the market's momentum.
Blue-chip stocks performed strongly, which included Fauji Fertiliser, Lucky Cement, Maple Leaf Cement, DG Khan Cement, Mari Energies, Fauji Cement, Cherat Cement, Hub Power and Pioneer Cement. Among these, Maple Leaf and Pioneer Cement hit their upper circuits (+10%) following Maple Leaf's announcement to acquire a controlling stake in Pioneer Cement, Sheraz added.
Topline Securities reported that bulls marched confidently as the KSE-100 index surged to the intra-day high of 2,760 points before settling at 160,657, up 2,474 points. The rally was fuelled by investor optimism following mergers and acquisitions in the cement sector.
Among corporate news, it mentioned, Maple Leaf Cement announced plans to acquire Pioneer Cement, as per a notice sent to the stock exchange. At present, Maple Leaf Cement and Maple Leaf Capital jointly hold an 18.6% stake in Pioneer Cement. The potential consolidation in the sector lifted investor sentiment, steering the market firmly into the bullish territory, it said.
Index-heavy stocks including Fauji Fertiliser, Lucky Cement, Maple Leaf Cement, DG Khan Cement and Mari Energies were among major gainers, contributing 1,309 points, Topline added.
JS Global analyst Muhammad Hasan Ather wrote that the strength in the market was largely driven by renewed investor optimism, led by likely approval of loan tranche disbursement by the IMF, alongside heavy buying across banking, cement, oil & gas and other key sectors.
Ather believes that the market looks poised to test the upside resistance near the 160,500-161,000 zone. However, with macro headwinds and geopolitical risks, he advised investors to adopt a selective, sector-focused stance.
Overall trading volumes jumped to 797.2 million shares versus Wednesday's tally of 757.2 million. The value of traded shares stood at Rs35.1 billion.
Shares of 477 companies were traded. Of these, 285 closed higher, 142 fell and 50 remained unchanged.
Bank Makramah was the volume leader with trading in 112.2 million shares, rising Rs0.20 to close at Rs5.59. It was followed by Dost Steels with 48.7 million shares, gaining Rs0.31 to close at Rs8.17 and First National Equities with 40.4 million shares, losing Rs1.03 to close at Rs19.63. Foreign investors were net sellers of shares worth Rs656 million, according to NCCPL.