Saudi visit, IMF talks take PSX to new record

KSE-100 index rises 229.86 points, settles at 70,544.58

KARACHI:

Pakistan Stock Exchange (PSX) on Monday managed to rise further to new record highs in an earnings season rally backed by gains in oil and banking stocks, despite volatile trading and concerns over escalating geopolitical tensions.

In the morning, when trading resumed after Eid holidays, the market got off to a lacklustre start, with the KSE-100 index dipping below the 70,000 mark to the intra-day low of 69,914.10 points. However, as the day progressed, market sentiment began to shift owing to the visit of a Saudi Arabian delegation, which raised expectations for increased trade, foreign direct investment (FDI) and strong bilateral ties.

Additionally, talks for a potential new International Monetary Fund (IMF) loan programme also positively influenced market activity.

Investors reinforced their positions by targeting blue-chip stocks, particularly in exploration and production (E&P), power and banking sectors. Despite minor fluctuations, the index touched the intra-day high of 70,608.88 points.

The market closed slightly below the day’s peak with modest gains, though there was some initial pressure due to the disturbing events unfolding in the Middle East.

“PSX reached a fresh record high in the earnings season, led by oil and banking stocks, on restraint over the rising geopolitical tensions,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Speculation about the positive outcome of the visit of a Saudi foreign minister-led delegation for bolstering trade, FDI and bilateral ties, and Pakistan finance minister’s visit for Pakistan-IMF talks on a new bailout programme played the role of catalysts in record close at the PSX.”

At close, the benchmark KSE-100 index recorded a rise of 229.86 points, or 0.33%, and settled at 70,544.58.

Topline Securities, in its report, said that a volatile session was observed with the KSE-100 index experiencing fluctuations.

Oil and Gas Development Company Limited (OGDCL, +3.77%) and Pakistan Petroleum (+1.48%) from the E&P sector managed to close in the green on the back of news that a high-level delegation of Saudi Arabia, led by its foreign minister, was arriving on a two-day official visit to Pakistan, it said.

Investors reinforced their equity positions, engaging in value-hunting, particularly targeting blue-chip stocks across the market. As a result, E&P, power and banking sectors made significant positive contributions.

Among those sectors, Hub Power, OGDCL, United Bank, Pakistan Petroleum and Pakistan State Oil collectively added 325 points to the index. Conversely, MCB Bank, Systems Limited and Engro Fertilisers saw profit-taking, resulting in a loss of 169 points, Topline added.

In its review, Arif Habib Limited (AHL) said that pressure at the market’s opening following events in the Middle East over the weekend found eager buyers to maintain the 70,000 level.

Hub Power (+2.78%), OGDCL (+3.8%) and United Bank (+2.35%) were the biggest contributors to the index gains, it said, adding that MCB Bank (-3.18%), Engro Corp (-1.68) and Systems Limited (-1.86%) were the major drags.

JS Global analyst Muhammad Shuja Qureshi said “as expected, the market remained volatile as the index touched its low at 69,914.” However, late buying in OGDCL and Pakistan Petroleum lifted the KSE-100 index to close with gains of 230 points. “Going forward, more gains are expected amid high volatility,” the analyst added.

Overall trading volumes increased to 555.2 million shares against Tuesday’s tally of 389.4 million. The value of shares traded during the day was Rs21.99 billion.

Shares of 353 companies were traded. Of these, 180 stocks closed higher, 156 dropped and 17 remained unchanged.

WorldCall Telecom was the volume leader with trading in 88.6 million shares, gaining Rs0.08 to close at Rs1.39. It was followed by Fauji Cement with 33.1 million shares, gaining Rs1.09 to close at Rs20.01 and Fauji Foods with 30.02 million shares, gaining Rs0.48 to close at Rs10.05.

Foreign investors were net buyers of shares worth Rs648.3 million, according to the NCCPL.

Published in The Express Tribune, April 16^th, 2024.

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