PSX surges to near 66,000 points on PM election, economic data

Our Correspondent
Tuesday, Mar 05, 2024

Stocks rose nearly one percent on Monday, boosted by the election of the new prime minister and positive economic data, analysts said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 626.04 points or 0.96 percent to close at 65,951.73 points. The highest index of the day remained at 66,007.44 points while the lowest level was recorded at 65,532.58 points. The KSE-30 index also increased by 271.55 points or 1.23 percent to 22,417.21 points.

The index was lifted by gains in energy and telecom stocks, which benefited from reports of government efforts to resolve the gas circular debt and strong foreign inflows, respectively. “Stocks closed bullish as investors weigh prime minister election, upbeat data on trade deficit and falling inflation,” said Ahsan Mehanti, an analyst at Arif Habib Corp. "Foreign inflows, rupee stability and falling KIBOR rates were catalysts in the bullish close at the PSX."

Traded shares increased by 128 million shares to 472.862 million shares from 344.227 million shares. The trading value rose to Rs16.282 billion from Rs13.385 billion. Market capital expanded to Rs9.402 trillion against Rs9.312 trillion. Of 358 companies active in the session, 184 closed in green, 153 in red and 21 remained unchanged.

Analyst Maaz Mulla at Topline Securities said the benchmark index crossed 66,000 points level brifely in the intraday trade after Shehbaz Sharif was elected as the Prime Minister for the second time by the National Assembly.

Analysts said the political development could bring some stability and continuity to the country's reform policy, which has been marred by uncertainty since the polls were held on Februaray 8.

The market also reacted positively to the latest economic data, which showed that the trade deficit narrowed by 30.2 percent year-on-year in the first eight months of the fiscal year 2023/24, and the inflation rate eased to 23.1 percent in February.

However, the market also faced some headwinds from the news that the International Monetary Fund (IMF) has proposed a sharp increase in taxes and the general sales tax rate for various items.

Media reports said the IMF has suggested that the Federal Board of Revenue should double the income tax rates for both salaried and non-salaried individuals, and raise the GST rate to 18 percent for items such as unprocessed food, stationery, medicines, and petroleum products.

Amid rumours suggesting government efforts to alleviate the gas circular debt, OGDC (+7.14 percent) and PPL (+5.98 percent) from the E&P sector closed in the green zone. The highest increase was recorded in Mari Petroleum Company Limited shares, which rose by Rs68.45 to Rs2,530.50 per share, followed by Bhanero Textile Mills Limited, which increased by Rs55.62 to Rs1,050 per share. A significant decline was noted in Rafhan Maize Products Company Limited, which fell by Rs213.28 to Rs8,636.72 per share, followed by Philip Morris (Pakistan) Limited, which closed lower by Rs40.33 to Rs731.67 per share.

Brokerage Arif Habib Ltd said the new trading week commenced on a robust note, with the benchmark index making significant gains, nearly reaching the 66,000 points level.

E&P (Energy and Petroleum) names led the charge, with OGDC (+7.17 percent), PPL (+6.01 percent), and MARI (+2.78 percent) emerging as the major contributors to gains. Conversely, banks weighed on the index as the main drag.

"With the all-time highs from last year at 67,000 points now within sight, market participants view declines into the support range of 65-65.5k as buying opportunities. Additionally, tech names continue to outperform, with PTC (+6.06 percent) seeing substantial trading volume exceeding 20 million shares. Expectations are high for AIRLINK and SYS to perform well in the upcoming sessions," the brokerage said.

Kohinoor Spining remained the volume leader with 67.438 million shares which closed higher by 32 paisas to Rs5.68 per share. WorldCall Telecom followed it with 60.210 million shares, which closed higher by 8 paisas to Rs1.37 per share.

Other significant turnover stocks included K-Electric Ltd., P.T.C.L., Oil & Gas Dev., Telecard Limited, Pak Petroleum, Fauji Cement, Hascol Petrol and B.O. Punjab. In Future’s Market, 331 companies recorded trading, of which 212 increased, 112 decreased and 7 remained unchanged.