Stocks rise on coalition hopes, tech outperformance spurs buying

Our Correspondent
Friday, Feb 23, 2024

Stocks extended gains for a second day, as technology shares surged and investors welcomed a political deal that paved the way for a new coalition government, dealers said.

The Pakistan Stock Exchange benchmark KSE-100 index closed at 61,914.34 points, up 355.19 points from Wednesday, when it gained 1.2 percent. The index traded in a range of 491.65 points, hitting an intraday high of 61,952.10 and a low of 61,460.45.

"Stocks closed higher after the government slashed National Savings Certificate rates and a coalition power-sharing deal led to political stability," said Ahsan Mehanti, an analyst at Arif Habib Corp.

He said that the outperformance of dollar bonds, strong earnings outlook and rupee stability also played a catalytic role in the bullish close. Dealers said the market was range-bound as investors were looking for direction from the government on the economic and political fronts.

“The benchmark index closed on a positive note today, extending yesterday’s streak, led by a rally in technology stocks,” brokerage house Ismail Iqbal Securities said in its post-market report.

Topline Securities said in a note that the market continued its recovery mood from yesterday. The equities initiated the business on a positive note, remained bullish almost throughout the session and eventually closed the day’s affair up 0.58 percent up."

"The aforesaid buying momentum can be attributed to consensus with regards to formation of new government where major political parties agreed and informed about upcoming coalition setup."

Technology, banking and fertilizer sectors contributed the most to the index's rise, as Systems Ltd, Meezan Bank Ltd, The Resource Group Pakistan Ltd, Engro Fertilizers Ltd and United Bank Ltd added a cumulative 367 points.

More than 324 million shares changed hands at the bourse, with a total value of Rs13.9 billion.Pak Elektron Ltd led the volumes chart with the trading of over 23.1 million shares. Out of 100 companies, 50 closed up, 41 closed down, two were unchanged and seven remained untraded.

The index was supported by Technology & Communication with 191.04, Commercial Banks with 114.38, Fertilizer with 75.66, Oil & Gas Marketing Companies with 26.75, and Textile Composite with 23.51 points.

The index was let down by Pharmaceuticals with 47.85, Cement with 32.25, Oil & Gas Exploration Companies with 19.66, Automobile Assembler with 15.77, and Tobacco with 4.61 points.

Companies adding points to the index were SYS with 122.93, MEBL with 88.36, TRG with 57.95, EFERT with 53.77, and UBL with 43.52 points. Companies that dragged the index lower were INDU with 34.59, LUCK with 25.08, PPL with 21.63, HINOON with 17.4 and NBP with 14 points.