KARACHI:
Pakistan Stock Exchange (PSX) on Wednesday continued its winning streak in a spectacular rally where the KSE-100 index climbed over 900 points as investors were optimistic about the prospect of setting up a coalition government.
Earlier, the trading session kicked off with a sharp spike with the bullish activity being driven by a mutual decision of political parties, which announced plans for a coalition administration at a press conference.
Consequently, the KSE-100 index hit its intra-day high at 62,432.25. The positive sentiment was bolstered by the upbeat data on car sales, which surged 30%.
During midday trading, there was some subdued activity, which resulted in the index hitting its intra-day low at 61,635.61.
However, appreciation of the rupee against the greenback put the market back on track. The bourse maintained the bullish trend throughout the day and closed above the 62,000 mark.
“Stocks showed sharp recovery as investors weighed the decision of forming a coalition government, upbeat data on car sales that surged 30% year-on-year (YoY) in January 2024 and MSCI’s inclusion of 22 firms in the frontier market and small-cap index,” said Arif Habib Corp MD Ahsan Mehanti.
“Strong earnings outlook and rupee stability played the role of catalysts in bullish close in the post-election rally at the PSX.”
At close, the benchmark KSE-100 index recorded gains of 926.92 points, or 1.51%, and settled at 62,153.84.
Topline Securities, in its commentary, said that it was a day with some sigh of relief. “Continuing its recovery mood from Tuesday, Pakistan equities initiated business on a positive note,” it said.
“The buying momentum can be attributed to clarification regarding the formation of a new government as major political parties agreed and announced the upcoming coalition setup via press conference.”
Owing to the development, across-the-board buying was witnessed throughout the trading hours.
Read Election fever influences trading at PSX
Resultantly, exploration and production (E&P), fertiliser, tech and oil marketing companies’ sectors contributed positively to the index as Pakistan Petroleum, Engro Corporation, Engro Fertilisers, Systems Limited and Pakistan State Oil added 343 points, Topline added.
Arif Habib Limited (AHL), in its report, noted that the recovery from sub-60,000 level continued with solid gains and the index bouncing off Tuesday’s lows.
“The Economic Coordination Committee (ECC) is expected to consider revising gas prices. The IMF, in its latest country report, has stated that the government needs to raise gas tariff by Feb 15, 2024,” it said.
Hub Power reported 2QFY24 earnings per share (EPS) of Rs11.78, up 15% YoY and 1HFY24 EPS of Rs24.95, up 44%. It also declared dividend per share of Rs4 (1HFY24 – Rs9), which was below expectations.
“The rally is now shaping up to test 63,000-64,000, which is a supply zone,” AHL added.
JS Global analyst Mohammed Waqar Iqbal stated that bulls pushed the KSE-100 index up as news flow on the political and economic fronts improved market sentiment.
“We recommend investors to avail any downside as an opportunity to buy stocks in cement, tech and E&P sectors,” the analyst added.
Overall trading volumes decreased to 303.9 million shares against Tuesday’s tally of 435.5 million. The value of shares traded during the day was Rs14.7 billion.
Shares of 342 companies were traded. Of these, 267 stocks closed higher, 56 dropped and 19 remained unchanged.
K-Electric was the volume leader with trading in 33.4 million shares, gaining Rs0.32 to close at Rs4.47. It was followed by Oil and Gas Development Company with 32.2 million shares, losing Rs2.17 to close at Rs122.01 and Pakistan Petroleum with 15.5 million shares, gaining Rs6.1 to close at Rs107.37.
Foreign investors were net buyers of shares worth Rs92.8 million, according to the NCCPL.
Published in The Express Tribune, February 15th, 2024.
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