PSX scales new highs on bullish sentiment

KARACHI:

The Pakistan Stock Exchange (PSX) on Monday soared to record highs by adding more than 700 points and at one stage breached the psychological barrier of 74,000 on optimism surrounding the outcome of loan talks between Pakistan and the International Monetary Fund (IMF ).

In the morning, the KSE-100 got off to a torrid start as the KSE-100 hit an intraday low of 73,109.76. Despite falling to the low of the day very soon, market sentiment gradually shifted to positives, which pushed the index higher.

The positive trend was boosted by the government’s discussion of privatization of loss-making state-owned enterprises and the proposed setting of ambitious targets for the Public Sector Development Program (PSDP) for the next financial year.

In addition, planned structural reforms in the areas of taxation, energy and state-owned enterprises also contributed to the upward trend.

As a result, the market breached the 74,000 mark and touched an intraday high of 74,114.22 after noon. While some gains were seen at this level, blue-chip stocks in various sectors, particularly exploration and production (E&P) and fertilizers, posted significant gains.

“Stocks closed at an all-time high amid speculation on the outcome of Pakistan-IMF talks on a new lending program,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Discussions on the privatization of state-owned enterprises, lofty PSDP targets in the federal budget for FY25 and structural reforms in taxation, the energy sector and state-owned enterprises played the role of catalysts in the record in the PSX.”

At the close, the KSE-100 index registered a notable gain of 713.61 points or 0.98% to settle at 73,799.11 points.

Topline Securities, in its report, commented that the 74,000 barrier was breached in intraday trade, but Pakistan stocks ended the day at 73,799 (up 714 points or 0.98%).

“Positive vibes from the IMF, revived foreign interest in attractive valuations and continued progress on the macroeconomic front could be attributed to this achievement,” it said. “Investors chose to further strengthen their positions by buying blue-chip stocks across the board.”

The E&P and fertilizers sectors were positive contributors, where Pakistan Oilfields, Dawood Hercules Corp, Engro Corp, Pakistan Petroleum and Mari Petroleum added 307 units, Topline added.

Arif Habib Limited (AHL), in its review, wrote that E&P names started their participation, leading the KSE-100 to a new all-time high as well as over 74,000 points.

Pakistan Oilfields (+7.5%), Dawood Hercules (+3.08%) and Engro Corp (+1.45%) were the top contributors to the index’s gains. The biggest losers were Fauji Fertilizer (-0.8%), Pak Elektron (-4.14%) and Pioneer Cement (-2.89%), according to AHL.

JS Global analyst Mohammed Waqar Iqbal commented that the uptrend continued as the PSX closed at 73,799.

“The market is expected to maintain the upward momentum. We recommend investors to buy cement, textile and pharmaceutical stocks,” the analyst added.

Total trading volume fell to 721.6 million shares from Friday’s 741.2 million. The value of shares traded during the day was Rs 25.6 billion.

Shares of 387 companies were traded. Of these, 241 stocks closed higher, 120 declined and 26 remained unchanged.

Cnergyico PK was the volume leader with 64.2 million shares traded, gaining Rs 0.37 to close at Rs 4.74. It was followed by WorldCall Telecom with 51.6 million shares, shedding Rs 0.07 to close at Rs 1.48 and Hum Network with 29.03 million shares, gaining Rs 0.12 to close at Rs 9.82.

Foreign investors were net buyers of shares worth Rs 839.5 million, according to NCCPL.

Published in The Express Tribune, May 14^u2024.

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