KARACHI:
Pakistan Stock Exchange (PSX) once again recorded a significant surge of nearly 1,300 points and spiked to a new all-time high above 101,000, driven by strong gains in the oil, banking and pharmaceutical sectors.
A combination of factors, including the favourable stock valuations ahead of the State Bank of Pakistan’s (SBP) policy rate announcement, contributed to the bullish momentum.
An increase in foreign exchange reserves, supported by $500 million loan disbursement by the Asian Development Bank (ADB) for Pakistan’s Climate Change and Disaster Resilience Enhancement Programme, further bolstered investor confidence.
Those developments, coupled with the easing of inflation expectations, led to a strong close for the benchmark KSE-100 index.
The market also saw hefty trading volumes, with significant contributions coming from key stocks such as Pakistan Petroleum and Pakistan State Oil.
The positive sentiment got further support from the banking sector’s continued strength, following the removal of the minimum deposit rate (MDR) requirement for corporate deposits.
In his analysis, Ahsan Mehanti of Arif Habib Corp commented that stocks were at a new all-time high, led by oil, banking and pharmaceutical shares on strong valuations.
He added that there had been speculation ahead of the SBP’s policy rate announcement next month, causing the forex reserves to surge and the government’s bond yields to fall amid thin inflation. These factors played the role of catalysts in the record close at the PSX.
At the end of trading, the benchmark KSE-100 index recorded an increase of 1,274.55 points, or 1.27%, to 101,357.32.
Topline Securities cited in its market review that another positive session was observed, attributed to news that the SBP had received $500 million from the ADB in loan for the government of Pakistan for the Climate Change and Disaster Resilience Enhancement Programme. This disbursement will most likely enable the SBP to end November with reserves of around $12 billion.
Additionally, Topline mentioned that the banking sector extended its gains as the removal of MDR requirement for corporate deposits continued to attract investor interest.
In terms of traded value, Pakistan Petroleum Ltd (Rs1.93 billion), PSO (Rs1.88 billion), The Searle Company (Rs1.63 billion), Oil and Gas Development Company (Rs1.53 billion) and Attock Refinery (Rs1.29 billion) dominated the market activity.
Point-wise, top contribution to the index came from Pakistan Petroleum, Service Industries, Bank Alfalah, Engro Corporation and The Searle Company, which cumulatively added 400 points.
In its weekly review, Topline noted that the KSE-100 rose 3.64% week-on-week, which could be attributed to the heavyweight banking sector, T-bills’ auction having bids of Rs2,494 billion and the government raising Rs616 billion against the target of Rs800 billion and maturity of Rs918 billion, and disbursement of $500 million in ADB loan.
In its research report, Arif Habib Limited (AHL) commented that there was a solid close to the week with the KSE-100 comfortably above 100k points.
Pakistan Petroleum (+2.55%), Service Industries (+10%) and Bank Alfalah (+4.4%) had the most upside contribution while Hub Power (-0.69%), TRG Pakistan (-2.84%), Fauji Fertiliser Company (-0.24%) were the biggest index drags.
AHL projected that inflation in November 2024 would come down to 4.7% year-on-year as compared to 7.2% last month, bringing the average inflation rate for 5MFY25 to 7.9%, a significant decrease from 28.6% in the same period of last year. “This marks the lowest inflation reading since April 2018, when it stood at 3.96%.”
It added that support for the index remained at 98k, against which more gains should be anticipated.
Overall trading volumes decreased to 915.5 million shares against Thursday’s tally of 1.16 billion. The value of shares traded during the day was Rs35.98 billion.
Shares of 454 companies were traded. Of these, 265 stocks closed higher, 137 fell and 52 remained unchanged.
The Bank of Punjab was the volume leader with trading in 95.1 million shares, increasing Rs0.35 to close at Rs9.20. It was followed by K-Electric with trading in 55.5 million shares, gaining Rs0.18 to close at Rs5.58 and Sui Southern Gas Company with 44.8 million shares, gaining Rs2.57 to close at Rs28.30.
During the day, foreign investors sold shares worth Rs65.8 million, according to the NCCPL.
