Bulls made a comeback at the Pakistan Stock Exchange (PSX) on Wednesday as the KSE-100 index touched a new peak above the 72,000-point mark over improved economic prospects.

Earlier, trading began on an optimistic note and the KSE-100 index hit the intra-day high of 72,414.32 points in the initial hours as investor confidence returned following Finance Minister Muhammad Aurangzeb’s statement that Pakistan’s foreign exchange reserves could reach “anywhere between $9-10 billion” by the end of June.

A better economic outlook coupled with anticipation of disbursement of the International Monetary Fund’s (IMF) final loan tranche of $1.1 billion boosted the interest of market players.

Expectations of a decline in April inflation reading following a record current account surplus also aided the bullish momentum. Resultantly, the index touched a new all-time high above the 72,000 mark.

“Stocks closed bullish over a strong economic outlook,” said Ahsan Mehanti, MD of Arif Habib Corp. “Finance minister’s affirmation of forex reserves reaching $9-10 billion by June, speculation ahead of the State Bank’s policy announcement on April 29, strong earnings in the banking sector and new IMF loan talks played the role of catalysts in record close at the PSX.”

At close, the benchmark KSE-100 index recorded a surge of 692.49 points, or 0.97%, and settled at 72,051.89.

Topline Securities CEO Mohammed Sohail commented that the PSX saw “another record high with the index gaining around 1,000 points during the day, mainly led by institutional buying. After a record current account surplus, investors now expect a big fall in April CPI (Consumer Price Index) that may result in a cut in interest rate in the coming months”.

In its report, Topline Securities said the KSE-100 index surged, experiencing an intra-day high of 1,055 points and low of 107.61 points.

“This surge was propelled by positive shifts in market sentiment in the backdrop of economic metrics such as foreign exchange reserves and inflation trends, which ignited expectations of forthcoming monetary easing,” it said.

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

Conversely, profit-taking was observed 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 Rs15.04 and Bank Alfalah posting EPS of Rs6.31, accompanied by cash dividends of Rs9 and Rs2 per share, respectively, Topline added.

Arif Habib Limited (AHL), in its report, stated that the “72,000 handle was hit with another near 1% day-on-day gain”.

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

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

Technology sector led the rally with Octopus Digital hitting its upper lock very early in the day. Cement and steel stocks continued their upward journey as investors anticipated a rate cut at next Monday’s monetary policy committee meeting, he said.

Refinery sector remained under pressure as Pakistan Refinery announced a loss for Q3. “The market is expected to post further gains, however, the possibility of profit-taking cannot be ruled out,” the JS analyst added.

Overall trading volumes decreased to 599.4 million shares against Tuesday’s tally of 655.9 million. The value of shares traded during the day was Rs24.5 billion.

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

Pakistan International Bulk Terminal was the volume leader with trading in 54.5 million shares, gaining Rs0.38 to close at Rs7.01. It was followed by K-Electric with 40.1 million shares, gaining Rs0.09 to close at Rs4.14 and Air Link Communication with 25.9 million shares, gaining Rs5.42 to close at Rs78.34.

Foreign investors were net sellers of shares worth Rs6.4 million, according to the NCCPL.

Published in The Express Tribune, April 25^th, 2024.

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