Shares soar to new high above 72k

KARACHI:

Bulls returned to the Pakistan Stock Exchange (PSX) on Wednesday as the KSE-100 index touched a new high above the 72,000 mark on an improving economic outlook.

Earlier, trading started on an upbeat note with the KSE-100 hitting an intraday high of 72,414.32 in the early hours as investor confidence returned after Finance Minister Muhammad Aurangzeb said Pakistan’s foreign exchange reserves could to reach “anywhere between $9-10 billion” by the end of June.

A better economic outlook combined with the expected disbursement of the final tranche of the International Monetary Fund (IMF) loan amounting to 1.1 billion dollars increased the interest of the market players.

Expectations of inflation easing in April following a record current account surplus also helped the upside momentum. As a result, the index touched a new all-time high above the 72,000 mark.

“Stocks closed higher on strong economic outlook,” said Ahsan Mehanti, MD of Arif Habib Corp. “The finance minister’s confirmation that foreign exchange reserves reached $9-10 billion by June, speculation ahead of the State Bank’s April 29 policy announcement, strong banking gains and fresh IMF loan talks played a role of the catalyst to record closing at PSX.”

At the close, the KSE-100 rose 692.49 points or 0.97% to trade at 72,051.89.

Topline Securities CEO Mohammed Sohail commented that the PSX hit “another record high with the index gaining about 1,000 points during the day, mainly from institutional buying. After a record current account surplus, investors are now expecting a big drop in April’s CPI (Consumer Price Index) which may lead to interest rate cuts in the coming months.”

In its report, Topline Securities said the KSE-100 index rose, hitting an intraday high of 1,055 points and a low of 107.61 points.

“This rise was driven by positive changes in market sentiment across economic metrics such as foreign exchange reserves and inflation trends, fueling expectations of imminent monetary easing,” it said.

Cement, banking, power and automobile sectors contributed significantly to the market rally, with notable contributions from Lucky Cement, Hub Power, Habib Bank, Millat Tractors and Systems Limited, which added 369 points.

In contrast, profit-taking was seen in Meezan Bank, Pakistan Tobacco and Pakistan Services, resulting in a cumulative loss of 85 points.

In the banking sector, MCB Bank and Bank Alfalah disclosed their financial results, with MCB Bank reporting earnings per share (EPS) of Rs 15.04 and Bank Alfalah recording EPS of Rs 6.31, accompanied by cash dividends of 9 Rs and Rs2 per share. respectively, Topline added.

Arif Habib Limited (AHL), in its report, said “the 72,000 handle was hit with another gain of nearly 1% on a daily basis.”

Tech names outperformed, including Air Link Communication (+7.43%), NetSol Technologies (+6.29%), Octopus Digital (+7.5%) and Avanceon Limited (+7.5%), he reported.

JS Global analyst Muhammad Shuja Qureshi said the KSE-100 closed at a record high.

The technology sector led the rally with Octopus Digital hitting the upper lock very early in the day. Cement and steel stocks continued to rally as investors awaited a rate cut at the monetary policy committee meeting next Monday, he said.

The refining sector remained under pressure as Pakistan Refinery reported a loss for the third quarter. “The market is expected to post further gains, however, profit-taking cannot be ruled out,” the JS analyst added.

Total trading volume fell to 599.4 million shares from Tuesday’s 655.9 million. The value of shares traded during the day was Rs 24.5 billion.

Shares of 382 companies were traded. Of these, 218 stocks closed higher, 139 declined and 25 remained unchanged.

Pakistan International Bulk Terminal was the volume leader with 54.5 million shares traded, gaining Rs 0.38 to close at Rs 7.01. It was followed by K-Electric with 40.1 million shares, gaining Rs 0.09 to close at Rs 4.14 and Air Link Communication with 25.9 million shares, gaining Rs 5.42 to close at Rs 78.34 .

Foreign investors were net sellers of shares worth Rs 6.4 crore, according to NCCPL.

Published in The Express Tribune, April 25^u2024.

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