PSX starts the week strong despite the trading halt

KARACHI:

Despite facing a temporary halt, the Pakistan Stock Exchange (PSX) started the week with significant gains of over 350 points amid the corporate earnings season and growing investor interest.

In the morning, trading got off to a good start but was soon interrupted by a fire incident at PSX. Later, the situation was brought under control and trading resumed soon after noon.

The KSE-100 index moved higher on investor optimism in the wake of the government’s measures on tax reforms in the FY25 federal budget and beyond the prospects of a staff-level agreement with the International Monetary Fund (IMF).

Additionally, speculation around strong corporate payouts, easing of monetary policy by the State Bank of Pakistan (SBP) and World Bank support for privatization of troubled state-owned enterprises (SOEs) further bolstered market sentiment.

Cement and banking sectors contributed significantly to the upward momentum of the market. Hence, the index hit an intraday high of 80,737.70 points and closed near the day’s high with notable gains.

“Stocks closed the earnings period higher as investors eyed a staff-level deal with the IMF following the government’s measures on tax reforms in the federal budget,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Speculation on strong corporate payouts, possible easing of SBP policy and World Bank’s support to the private sector in privatization of distressed SOEs played the role of catalysts in the higher close in the PSX.”

In late trade, the KSE-100 index gained 353.41 points, or 0.44%, to settle at 80,566.21.

Topline Securities, in its report, said that “trading was halted for two hours due to a fire that broke out on the fourth floor of the stock exchange. The PSX building was evacuated and trading resumed once the fire was under control.”

The cement and banking sectors continued their positive momentum from last week, with Maple Leaf Cement, Fauji Cement, Lucky Cement, DG Khan Cement, Habib Bank, National Bank of Pakistan and Allied Bank contributing a cumulative 267 points to the index , Topline added.

Arif Habib Limited (AHL), in its report, commented that the market was “steady above 80,000 as the week started with a disrupted session following the fire explosion at the PSX building”.

Some 59 stocks advanced while 39 declined with Habib Bank (+2.86%), National Bank (+8.55%) and Allied Bank (+9.1%) the biggest contributors to the index’s gains , AHL said, adding that MCB Bank (-1%), Millat Tractors (-1.73%) and Pakistan Oilfields (-1.14%) were the biggest drags.

JS Global analyst Mubashir Anis Naviwala wrote that the KSE-100 started the day on a positive note, but trading was soon halted due to a fire at the PSX facility.

“Significant buying was seen in banking stocks, although overall volumes remained light due to a shortened trading day,” he said. “Going forward, a dip-buy strategy is recommended primarily in banking, technology and oil and gas stocks,” the analyst added.

Total trading volume fell to 261.6 million shares compared to Friday’s tally of 448.98 million. The value of shares traded during the day stood at Rs 13.02 billion.

Shares of 427 companies were traded. Of these, 216 stocks closed higher, 158 declined and 53 remained unchanged.

Hum Network was the volume leader with 20.7 million shares traded, gaining Rs 0.5 to close at Rs 11.36. It was followed by National Bank with 19.6 million shares, gaining Rs 4.01 to close at Rs 50.92 and Bank of Punjab with 17.6 million shares, gaining Rs 0.09 to close at Rs5.79.

Foreign investors were net sellers of shares worth Rs 75.2 million, according to NCCPL.