PSX ends highly bullish in pre-budget rally

Pakistan Stock Exchange (PSX) on Monday closed on a bullish note, powered by a pre-budget rally that saw the benchmark KSE-100 index surge over 1,500 points.

Analysts attributed the positive momentum to a robust economic outlook, fuelled by finance minister’s comments on rising remittances, higher foreign exchange reserves, low inflation and support for the construction industry.

The index commenced trading on a bearish note, touching its intra-day low at 943 points due to concerns over a court ruling to uphold the windfall tax. Despite that, the market rebounded with a surge in the exploration and production (E&P) sector.

Ahsan Mehanti of Arif Habib Corp commented that stocks closed bullish in a pre-budget rally due to strong economic outlook, after the finance minister pointed to surging remittances, higher forex reserves, low inflation and support for the construction industry.

He added that upbeat data of cement exports that grew 25% in July-January FY25, government deliberations on privatisation of state-owned enterprises and speculation about IMF talks on $1 billion worth of climate funding played the role of catalysts in bullish close at the PSX.

At the end of trading, the KSE-100 index recorded an increase of 1,529.17 points, or 1.36%, to 114,330.10.

Topline Securities stated that the local bourse commenced the week on a bearish note, with the index plunging to the intra-day low of 943 points. The initial downturn was fuelled by concerns over the court’s decision to uphold the windfall tax.

Market sentiment remained fragile as the FBR, following Sindh High Court’s directive, recovered Rs23 billion in a single day from 16 banks, it said.

However, the tide shifted in the latter half of the session, led by a robust recovery in the E&P sector. The market staged an impressive rebound, surging to the intra-day high of 1,772 points.

Investor sentiment improved following reports that the government was once again prioritising the resolution of circular debt. Media sources indicated that authorities were exploring various avenues to address the issue, including a potential Rs1.2 trillion borrowing plan from banks while capitalising on the recent decline in interest rate, Topline said.

Additionally, the government was keen on finalising the term sheet ahead of arrival of an IMF mission, which further strengthened market confidence, it added.

In its report, Arif Habib Limited (AHL) commented that KSE-100 dropped into the 112,000 support zone and then registered a strong reversal, going above 114,000 points. Some 55 shares rose while 41 fell with Fauji Fertiliser Company (+2.13%), MCB Bank (+4.94%) and Oil and Gas Development Company (+3.76%) contributing the most to index gains.

AHL said Askari Bank announced CY24 earnings per share (EPS) of Rs14.58 and dividend per share of Rs3. Earnings were above expectations while the payout was below street consensus. Additionally, Sazgar Engineering (-0.62%) announced 1HFY25 EPS of Rs109.6, up 368%, and dividend per share of Rs20.

Overall trading volumes increased to 455.5 million shares compared with Friday’s tally of 455.4 million. The value of shares traded during the day stood at Rs25.9 billion.

Shares of 440 companies were traded. Of these, 176 stocks closed higher, 211 fell and 53 remained unchanged.

At-Tahur Limited was the volume leader with trading in 43.1 million shares, falling Rs3.1 to close at Rs28. It was followed by K-Electric with 27.2 million shares, gaining Rs0.12 to close at Rs4.79 and Fauji Cement with 25.8 million shares, gaining Rs0.35 to close at Rs42.47. During the day, foreign investors sold shares worth Rs209.7 million.