UAE investment hopes drive PSX to record high

KARACHI:

The Pakistan Stock Exchange (PSX) on Friday soared to a new all-time high near the 76,000 mark, fueled by assurances of $10 billion in investment from the United Arab Emirates (UAE) and the International Monetary Fund’s (IMF) statement that Pakistan had made significant progress towards agreement at staff level.

Earlier, trading started on a bullish note and the stock market rose steadily till midday. After trading resumed, the KSE-100 moved further north, hitting an intraday high of 76,248.76.

However, some profit-taking dragged the index lower, but the market still finished trading at a record high near 76,000 points.

Among other important factors were the appreciation of the Pakistani rupee, which gained Rs 0.09 to Rs 278.21 against the US dollar, and the decline in weekly inflation by 0.34%.

Investors were very optimistic that Pakistan would be able to win a bigger and bigger IMF loan program. Pre-Budget speculation also provided support to the market.

“Stocks closed at an all-time high in a pre-Budget rally led by general investment interest after the UAE pledged $10 billion in investment across multiple sectors amid a firm rupee and rising foreign reserves,” he said. Ahsan Mehanti. , MD of Arif Habib Corp.

“Expectations of SBP’s policy rate cut next month, government’s discussions on privatization of state-owned units and foreign capital inflows played the role of catalysts in the record close in the PSX.”

At the close of trade, the benchmark KSE-100 registered a significant gain of 868.56 points or 1.16% to settle at 75,983.04.

Topline Securities in its report said that a positive session was observed as the index gained 869 points.

“This positivity can be attributed to the IMF’s statement that the Pakistani authorities and the fund have made significant progress towards reaching a staff-level agreement as talks have concluded,” it said.

The major positive contributors were United Bank Limited, MCB Bank, Meezan Bank, Hub Power and Engro Fertilizers as they cumulatively added 414 units, Topline added.

Arif Habib Limited (AHL), in its commentary, wrote “76k was finally tagged with the KSE-100 index, which gained 0.87% weekly.”

United Bank (+3.57%), Hub Power (+2%) and Meezan Bank (+2.34%) were the biggest contributors to the index’s gains. In contrast, TRG Pakistan (-1.23%), Cherat Cement (-1.56%) and EFU General Insurance (-5.26%) dragged the index down.

“Significant progress has been made in the IMF-Pakistan talks to reach a staff-level agreement on a comprehensive economic policy and reform agenda,” he pointed out.

“With the market reaching 76k, further gains can be seen. However, declines below 74k would indicate the start of a correction period,” AHL added.

JS Global analyst Mohammed Waqar Iqbal noted that government institutions were active buyers in the market where the KSE-100 gained 868 points daily.

“Going forward, the market is expected to maintain its accumulation phase in the near term,” the analyst added.

Total trading volume fell to 609.8 million shares from Thursday’s 758.9 million. The value of shares traded during the day was Rs 23.6 billion.

Shares of 383 companies were traded. Of these, 215 stocks closed higher, 145 declined and 23 remained unchanged.

K-Electric was the volume leader with 130.1 million shares traded, shedding Rs 0.03 to close at Rs 5.21. It was followed by WorldCall Telecom with 50.6 million shares, losing Rs 0.03 to close at Rs 1.42 and Dewan Cement with 28.3 million shares, gaining Rs 0.66 to close at Rs 10.91.

Foreign investors were net buyers of shares worth Rs 506.4 million, according to NCCPL.

Published in The Express Tribune, May 25^u2024.

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