Stocks gain on government clarity, Moody’s rating signal

Stocks rose on Wednesday as investors welcomed the summoning of a National Assembly session by the speaker to form a new government and Moody's hinted at a possible upgrade of the country's rating if its external and liquidity risks eased.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed up 484.35 points or 0.77 percent at 63,703.45 points against, after hitting a high of 63,929.58 points and a low of 63,042.15 points. The KSE-30 index also rose 0.95 percent to 21,507.94 points.

"Bullish activity witnessed as investors weigh National Assembly session summoned to setup the new government and Moody's hints over upgrade on government external, liquidity risk fall," said Ahsan Mehanti, an analyst at Arif Habib Corp.

The government's efforts to secure up to $8 billion in IMF loans under special drawing rights and China's rollover of $2 billion debt also boosted sentiment in the post-election rally, he said.

Traded shares increased by 52 million shares to 461.390 million shares from 409.962 million shares. The trading value rose to Rs16.000 billion from Rs14.675 billion.

Market capital expanded to Rs9.141 trillion against Rs9.089 trillion. Of 355 companies active in the session, 180 closed in green, 149 in red and 26 remained unchanged.

Analyst Ali Najib at Topline Securities said the market started on a positive note and remained bullish throughout the session, driven by clarity on the formation of the new government and positive news on Pakistan's rating outlook.

"News vibes regarding Pakistan's rating likely to be upgraded if the government's external and liquidity risks are reduced, foresees by Moody's (an international rating agency)," he said. Najib said the buying momentum was broad-based, with the fertiliser, cement, banking and oil exploration sectors contributing the most to the index. FFC, EFERT, LUCK, MCB and OGDC added 314 points collectively.

The highest increase was recorded in Unilever Pakistan Foods Limited, which rose by Rs655 to Rs21,800 per share, followed by The Premier Sugar Mills, which increased by Rs33.75 to Rs483.75 per share.

A significant decline was noted in Pakistan Services Limited, which fell by Rs50 to Rs740 per share, followed by Bata Pakistan Limited, which closed lower by Rs25 to Rs1,700 per share. Mohammed Waqar Iqbal, an analyst at JS Global, said the market displayed a positive trend throughout the day with notable activity in the banking and oil exploration (E&P) sectors.

“Going forward, a cautious approach is recommended, investors are advised to sell on strength,” he advised. Cnergyico PK remained the volume leader with 62.181 million shares which closed higher by 34 paisas to Rs4.39 per share.

K-Electric Ltd. followed it with 45.494 million shares, which closed higher by 27 paisas to Rs4.79 per share. Other significant turnover stocks included Hascol Petrol, WorldCall Telecom, Pak Refinery, Telecard Limited, TRG Pak Ltd, Unity Foods Ltd, Fauji Foods Ltd and P.T.C.L. In Future’s Market, 318 companies recorded trading, of which 182 increased, 133 decreased and 3 remained unchanged.