Stocks close near 85k mark amid falling bond yields

KARACHI: Stocks surged to an all-time high near the 85k mark amid falling bond yields and expectations for a further sharp drop in inflation. Speculations in the earnings season also played a crucial role in the rally.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 share index surged by 1,378.34 points or 1.65 percent to 84,910.3 points against 83,531.96 points recorded in the last session. The highest index of the day remained at 85,047.81 points while the lowest level was recorded at 83,303.55 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed at an all-time high led by blue chip oil scrips amid speculations in the earnings season. PPL $6m inflows for a close-out settlement with Iraq’s Midland Oil triggered the rally.”

He said that surging global crude oil prices, slump in banking lending rates and government deliberation on privatization of SOEs played a catalyst role in the bullish activity in PSX.The KSE-30 index increased by 487.31 points or 1.82 per cent to 27,197.43 points against 26,710.12 points.

Traded shares increased by 68 million shares to 449.507 million shares from 381.529 million shares. The trading value increased to Rs30.196 billion from Rs20.523 billion. Market capital expanded to Rs11.077 trillion against Rs10.879 trillion. Of the 448 companies active in the session, 218 closed in green, 167 in red and 63 remained unchanged.

Naveed Nadeem, an analyst at Topline Securities, said the KSE-100 index soared to an impressive close at 84,910, jumping by 1,378 points or 1.65 per cent. “This surge was driven by falling bond yields and an expected sharp drop in inflation, igniting a wave of optimism in the market.”

Key players like OGDC, PPL, FFC, POL and Engro fuelled the rally, contributing a remarkable 752 points to the index.The highest increase was recorded in Hoechst Pakistan Limited shares, which rose by Rs185.2 to Rs2,285.2 per share, followed by Pakistan Tobacco Company Limited, which increased by Rs85.77 to Rs1,027.45 per share. A significant decline was noted in Bhanero Textile Mills Limited, which fell by Rs82.77 to Rs966.73 per share; Hallmark Company Limited followed it, which closed lower by Rs43.04 to Rs1,132.30 per share.

Brokerage Arif Habib Ltd stated that the KSE-100 index surged by 1.65 per cent on Monday, edging closer to the 85,000-point milestone.

PPL’s performance was bolstered by news of a favourable settlement between its subsidiary, PPL Asia E&P BV, and Iraq’s Midland Oil Company. As part of the settlement, Midland Oil will make a payment of $6 million (Rs1,665 million), or Re0.61 per share, to PPL Asia via a third party.

The latest financial reports from OGDC and PPL also show a significant improvement in their gas sales collections, attributed to the timely revision of consumer gas prices. With this enhanced revenue flow, both companies are expected to maintain a strong liquidity position. Looking ahead, both OGDC and PPL are expected to consider capital-intensive projects, such as offshore drilling, as part of their growth strategy.

In the near term, support for the KSE-100 has risen to 84,000 points, with further price gains likely to follow.Pak Petroleum remained the volume leader with 40.779 million shares which closed higher by Rs8.09 to Rs126.69 per share. Hub Power Co XD followed it with 28.080 million shares, which closed lower by Rs3.64 to Rs121.70 per share.

Other significant turnover stocks included Fauji Cement XD, Kohinoor Spining, Oil & Gas Dev, Pace (Pak) Ltd, Air Link Commun, WorldCall Telecom, Bank Al-Falah and Hum Network.In the futures market, 313 companies recorded trading, of which 224 increased, 86 decreased and 3 remained unchanged.