PSX soars past 62,000 mark as investors ride the IMF wave

KARACHI: Stocks climbed to a new record high on Monday, crossing the 62,000 mark for the first time, as investors bet on the country’s economic recovery under an IMF bailout programme, dealers said.

Pakistan Stock Exchange (PSX)’s benchmark KSE-100 index gained 801.80 points or 1.3 percent to close at 62,493.05, after reaching an intraday peak of 62,912.61. The gauge has advanced 23.5 percent this year, outperforming most of its regional peers.

The volume of shares traded on the KSE-100 index was 368.996 million, while the total turnover on the exchange was Rs31.6 billion. During the session, 56 closed companies up, 21 closed down, while 23 remained untraded.

Dealers expressed optimism among market participants, who anticipate further improvement in the country's economic situation, particularly in light of positive economic indicators, government announcements of major investments from Gulf nations, and the establishment of free trade agreements with these countries.

The latest figures released by the State Bank of Pakistan (SBP) showed trade deficit of $9.38 billion during the current fiscal year, a 33.59 percent decrease compared to the same period last year.

"Stocks reached a new all-time high amidst speculation ahead of a landmark free trade agreement with the GCC, government measures regarding the Pakistan Sovereign Wealth Fund, and the IMF board's approval this week for the release of over $700 million in tranches under the SBA," said analyst Ahsan Mehanti at Arif Habib Corp.

He attributed the PSX's record close to rupee stability amidst renewed foreign interest, a 7.66 percent surge in exports, and a 31.7 percent narrowing of the trade deficit in November 2023.

During the previous week, the bourse had continued with its upward rally and hit new record levels on the back of continuous healthy buying by both local and foreign investors coupled with institutional support.

Ali Najib, an analyst at Topline Securities, said equities started the week on a strong note, with the benchmark index surpassing the 62,000 mark, closing 801 points up. "The bull run at PSX is in full swing, with 'Fear of Missing Out' (FOMO) buying evident across the board," Najib said.

"As far as correction goes, it comes sector-wise instead of across of the board in the market and that too on intraday basis," he added." "As today, it was cement & banking sector which faced some selling headwinds and profit taking was witnessed in them. Subsequent proceeds got invested in energy sector stocks."

Brokerage Arif Habib Limited in a post market note said the bullish momentum to continue well into 2024, as robust earnings growth, enticing valuation, substantial domestic liquidity, and comparatively steady economic growth will make the benchmark index yield an attractive total return of 32 percent.

The index was supported by oil & gas exploration companies (273.46 points), automobile assembler (81.29 points), oil & gas marketing companies (64.18 points), food & personal care products (58.97 points), and fertilizer (57.95 points).

Companies contributing positively to the index were PPL (107.77 points), OGDC (98.23 points), MTL (68.59 points), MARI (58.64 points), and HUBC (43.08 points).

Sectors contributing negatively to the index were synthetic & rayon (4.86 points), tobacco (2.29 points), textile spinning (2.07 points), vanaspati & allied industries (0.34 points), and automobile parts & accessories (0.2 points).

Companies dragging the index lower were UBL (17.67 points), LUCK (11.69 points), MLCF (8.06 points), HMB (7.72 points), and MCB (7.67 points).