KARACHI:
Pakistan Stock Exchange (PSX) on Thursday staged a handsome rebound as the KSE-100 index soared more than 1,000 points on the back of optimism about a positive outcome of the ongoing International Monetary Fund (IMF) review and the upgrading of banking sector outlook by Moody’s.
There was a sense of relief because of smooth negotiations with the IMF ahead of the release of second loan tranche and following a successful operation against terrorists in Balochistan that led to the rescue of all hostages of Jaffar Express.
Throughout the trading session, the market remained in the green, with the index advancing to the intra-day peak of 115,247, led by strong performances in cement, fertiliser, oil and gas, and power sectors.
Arif Habib Corp MD Ahsan Mehanti commented that stocks showed recovery after Moody’s upgraded the outlook on Pakistan’s banks from stable to positive, citing improving financial performance and macroeconomic conditions.
“Speculation about the resolution of power sector’s circular debt, ahead of the release of IMF tranche next month, along with surging global crude oil prices, played the role of catalyst in bullish close at the PSX,” he added.
At the end of trading, the benchmark KSE-100 index posted a sharp rise of 1,009.70 points, or 0.89%, and settled at 115,094.24.
Topline Securities, in its review, wrote that investor optimism fuelled a strong bullish trend, with the index hitting an impressive intra-day high of 1,162 points before closing at 115,094, marking a notable gain of 1,010 points.
The positive momentum was largely driven by growing confidence that the ongoing review talks with the IMF would conclude smoothly. It acted as a key catalyst that encouraged aggressive buying across major sectors, Topline said.
The rally was predominantly led by Fauji Fertiliser Company (FFC), Pakistan State Oil, Lucky Cement, Engro Holdings and Mari Petroleum, which collectively contributed 506 points to the index, it added.
Arif Habib Limited (AHL) noted that displacement to the upside was seen on Thursday, with the KSE-100 taking out 115k and setting up a move towards 116k before the end of the week.
A total of 69 shares rose, while 28 fell. Pakistan State Oil (+4.56%), FFC (+1.32%) and Lucky Cement (+2.83%) contributed the most to the index gains. On the other hand, Service Industries (-2.55%), Pakistan Oilfields (-0.68%) and Bank Alfalah (-0.83%) were the biggest drags, it said.
“The index is currently up 0.67% week-on-week and is on track to have a fifth consecutive positive week, with the target being 116k,” AHL added.
KTrade Securities, in its market wrap, stated that the PSX witnessed a significant turnaround, with the benchmark index closing up 0.89%.
The reversal was driven by better activity, the rescue of train passengers in Balochistan and reports of successful IMF negotiations. In terms of sectors, cement, fertiliser, oil and gas, and power contributed to the increase in the index, it said. The market’s long-term prospects remained impressive, driven by positive economic developments and satisfactory IMF talks, KTrade added.
JS Global analyst Muhammad Hasan Ather commented that the stock rally was fuelled by optimism about a potential resolution to the energy sector circular debt and the upgrading of Pakistan’s banking outlook. Investors remained upbeat ahead of the conclusion of the IMF review, hoping for approval of the next loan tranche, he said.
Overall trading volumes increased to 382.8 million shares compared with Wednesday’s tally of 299.6 million.
Shares of 444 companies were traded. Of these, 232 stocks closed higher, 156 fell and 56 remained unchanged. The value of shares traded during the day was Rs25.4 billion.
The Bank of Punjab was the volume leader with trading in 48.8 million shares, rising Rs0.36 to close at Rs13.45. It was followed by Barkat Frisian Agro with 24.7 million shares, gaining Rs1.76 to close at Rs28.40 and Fauji Cement with 19.7 million shares, rising Rs1.42 to close at Rs45.29. During the day, foreign investors sold shares worth Rs645.4 million, the NCCPL reported.
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