Stocks rally to new peak on SOE sell-off buzz

Stocks gained to a record close on Wednesday, with the benchmark index piercing through the 66,000 psychological barrier, buoyed by investor optimism over the government’s privatisation plans for state-owned enterprises and the national carrier, Pakistan International Airlines (PIA).

The Pakistan Stock Exchange's (PSX) KSE 100-share Index gained 641.51 points or 0.97 percent to close at 66,547.79 points. The highest index of the day remained at 66,607.88 points while the lowest level was recorded at 66,003.44 points. The KSE-30 index increased by 207.01 points or 0.95 percent to 21,914.86 points. "Stocks closed at an all-time high as the government deliberated the privatisation process, approving the Scheme of Arrangement (SoA) of PIA, and global investors expressed interest in the target of June selloff plans for ailing state-owned enterprises," said analyst Ahsan Mehanti at Arif Habib Corp.

"Rupee stability, the prime minister's commitments over the second phase of CPEC, and foreign inflows played a catalytic role in the bullish close at the PSX."

Traded shares increased by 51 million shares to 354.597 million shares from 303.710 million shares. The trading value dropped to Rs11.884 billion from Rs12.078 billion. Market capital expanded to Rs9.346 trillion from Rs9.265 trillion. Of the 346 companies active in the session, 179 closed in green, 152 in red, and 15 remained unchanged.

"Positive vibes from the IMF, rejuvenated foreign interest at all-time low historic valuations, and progress on SOE privatisation could likely be accredited to the current bullish rally in the market," said analyst Ali Najib at Topline Securities. "Investors chose to further strengthen their equity position by buying blue-chip stocks across the board."

Resultantly, the power, bank, and fertilizer sectors contributed positively to the index as HUBC, MEBL, UBL, MCB, and ENGRO added 319 points, cumulatively. On the flip side, PPL, NBP, and MTL saw some profit-taking as they cumulatively lost 67 points.

The highest increase was recorded in Nestle Pakistan Limited shares, which rose by Rs235 to Rs7,635 per share, followed by Shahmurad Sugar Mills Limited, which increased by Rs31.38 to Rs472 per share. A significant decline was noted in Rafhan Maize Products Company Limited, which fell by Rs240 to Rs8,050 per share, followed by Sapphire Fibres Limited, which closed lower by Rs106.50 to Rs1,476 per share.

Brokerage Arif Habib Ltd said the benchmark index has finally breached the crucial 66,000 points mark, marking a significant milestone in its recent performance. "This breakthrough is expected to provide support for the index's upward trajectory, potentially paving the way for new all-time highs."

There are significant developments on the economic front. According to the Finance Minister, Pakistan aims to conclude an IMF staff-level agreement for a new loan program by the end of June or early July. This development underscores the government's efforts to address economic challenges and bolster investor confidence.

Furthermore, investor attention is focused on the FTSE equity country classification review, scheduled after the US market close. Pakistan is on the watchlist for potential demotion from Secondary Emerging to Frontier market status. The outcome of this review will be closely monitored by market participants and could impact investor sentiment on Thursday.

Lotte Chemical remained the volume leader with 42.831 million shares, which closed higher by 55 paisas to Rs19.53 per share. Telecard Limited followed it with 29.177 million shares, which closed higher by 75 paisas to Rs9.24 per share.

Other significant turnover stocks included PTCL, The Organic Meat, Hascol Petrol, TRG Pak Ltd, Agritech Limited, Cnergyico PK, WorldCall Telecom, and Pak Reinsurance.

In the Future Market, 319 companies recorded trading, of which 203 increased, 111 decreased, and 5 remained unchanged.