Optimism steers PSX to new highs

Source: Dawn
Author: Muhammad Kashif

KARACHI: Amid growing optimism about an improved economic outlook, several triggers helped the Pakistan Stock Exchange (PSX) achieve another milestone by closing the outgoing week at an all-time high above the 72,000 level.

Rising hopes of an interest rate cut following a sharp slowdown in March inflation to 20.7pc, expectations of a further deceleration to 17pc in April, and the IMF's Executive Board meeting to approve the $1.1 billion last tranche next week kept investors in a bullish mindset throughout the outgoing week.

According to Arif Habib Ltd (AHL), the bullish market sentiment was also fuelled by strong performances in certain scrips during the ongoing result season.

Furthermore, the country achieved its highest monthly current account surplus in almost nine years, $619 million, in March. Also, foreign direct investment hit the highest level since June 2022, $258m, up 89pc over the preceding month. The rupee closed at Rs278.39 against the US dollar, depreciating by eight paise or 0.03pc week-on-week.

As a result, the benchmark KSE 100-share index closed at an unprecedented level of 72,742.75 points after gaining 1,833 points or 2.58pc week-on-week.

AKD Securities Ltd said the positive momentum was largely driven by anticipation of investments from Saudi Arabia, the successful visit of Iran's president, and Pakistan's inclusion in the IMF's executive board agenda for its meeting on April 29.

Other news flows included IT exports surging 37pc to record $306m in March, RDA inflows rising to $7.66bn, and GDP expected to grow 2.6pc in FY24.

AHL said the sector-wise positive contributions came from fertiliser (562 points), cement (380 points), banks (348 points), exploration and production (201 points), and power (155 points).

Meanwhile, the sectors that contributed negatively were tobacco (54 points), miscellaneous (48 points), OMCs (39 points), refinery (29 points), and chemical (19 points). Scrip-wise, positive contributors were Engro Fertilisers Ltd (332 points), United Bank Ltd (214 points), Lucky Cement (207 points), Mari Petroleum Company Ltd (164 points), and Hub Power Company Ltd (156 points).

Meanwhile, scrip-wise negative contributions came from Pakistan Tobacco Company Ltd (55 points), Pakistan Services Ltd (49 points), Pakistan Oilfield Ltd (44 points), National Bank of Pakistan (29 points) and Meezan Bank Ltd (27 points).

Foreign buying continued at $3m compared to $33.9m last week. Major buying was witnessed in E&Ps ($1.9m) and commercial banks ($1.2m). On the local front, selling was reported by insurance ($13.1m), followed by NBFCs ($0.1m).

The average trading volume rose 32pc to 650m shares while the average value traded increased by 22pc to $94m week-on-week.

In a significant development, Shanghai Electric Power Company withdrew its offer to acquire up to 66.4pc of K-Electric Ltd.

AKD Securities Ltd said the upcoming Monetary Policy Committee meeting on Monday would remain in the limelight next week. The start of monetary easing is poised to further support the ongoing bullish market trend, which is led by debt-heavy sectors.

Additionally, the disbursement of the third tranche of the IMF's SBA and initiation of talks for a new Extended Fund Facility would be closely monitored.