Led by banks, stocks shoot up to new record M Haris

Pakistan Stock Exchange (PSX) on Thursday soared to a new record high at around 78,800 points with a sharp rise of nearly 2,100 points in the first session post-Eidul Azha holidays, driven by the combined effect of a strong banking sector performance and positive economic outlook.

The bourse made a rapid advance towards north as soon as trading commenced with investors pouring heavy investment into banking, auto, fertiliser, oil and gas exploration, oil marketing companies and refineries’ sectors.

Investor confidence was bolstered by a report of Fitch Ratings where it noted that Pakistan’s budget for fiscal year 2024-25 was “ambitious” and it could improve chances of securing a loan deal with the International Monetary Fund (IMF).

Market participants responded favourably to the economic indicators which pointed to a stable growth and controlled inflation. The prime minister’s announcement of a reduction in electricity tariffs for the industrial sector gave a boost to stock buying in cement, textile and pharmaceutical sectors.

The KSE-100 index closed on a buoyant note after staying in the green throughout the day as bullish sentiment prevailed.

“Stocks closed at an all-time high on a strong economic outlook,” remarked Ahsan Mehanti, MD of Arif Habib Corp.

“Fitch Ratings’ projections of a potential IMF deal, narrow fiscal deficit, reduced external pressure, current account deficit contraction to 0.3% of gross domestic product and investor speculation about a surge in SOEs’ (state-owned enterprises) dividend payments and the government’s privatisation proceeds in FY25 played the role of catalysts in record close at the PSX.”

At the end of trading, the benchmark KSE-100 index registered a surge of 2,094.76 points, or 2.73%, and settled at 78,801.53.

Topline Securities, in its report, commented that it was “a new day with a new high”. “This positive run was mainly driven by the banking sector where the United Bank, MCB Bank, Habib Bank, Bank AL Habib, Allied Bank and Faysal Bank closed at their respective upper circuits and contributed 1,086 points,” it said.

On the news front, global ratings agency Fitch stated that Pakistan’s federal budget for 2024-25 enhanced the likelihood of securing an IMF deal. In the textile sector, Interloop Limited and Kohinoor Textile Mills closed at their upper circuits on the back of news that Prime Minister Shehbaz Sharif had announced a reduction of Rs10.69 per unit in the electricity price for industries, Topline added.

Arif Habib Limited (AHL), in its review, underlined that the PSX saw “big gains post-Eid holidays with banks taking the KSE-100 above 78,500”.

Momentum remained very strong and the aggressive moves higher in bank, cement and pharma stocks could lead to catch-up moves over the coming sessions, it said, adding “support rises to 76,000, above which we expect higher prices”.

Overall trading volumes increased to 452.6 million shares against Friday’s tally of 395.9 million. The value of shares traded during the day was Rs20.7 billion.

Shares of 447 companies were traded. Of these, 256 stocks closed higher, 133 fell and 58 remained unchanged.

Silkbank was the volume leader with trading in 53.6 million shares, gaining Rs0.23 to close at Rs1.09. It was followed by K-Electric with 23.1 million shares, gaining Rs0.1 to close at Rs4.72 and Habib Bank with 20.9 million shares, gaining Rs9.55 to close at Rs121.92.

Foreign investors were net sellers of shares worth Rs559.7 million, according to the NCCPL.