The Pakistan Stock Exchange (PSX) witnessed another positive session on Thursday as its benchmark KSE-100 Index closed higher by 533 points, with analysts attributing the bullish run to lower cut-off yields.
The KSE-100 started the session with a buying spree that kept its momentum throughout the session. The bears showed some resistance but could not maintain their grip.
At close, the benchmark index settled at 78,793.41, up by 532.56 points or 0.68%.
“This sustained positive momentum is largely credited to yesterday’s treasury bill auction, where the government significantly lowered the cut-off yields by up to 148 basis points,” brokerage house Topline Securities said in its post-market report.
Cement and steel sectors showed marked optimism as investors anticipate a rate cut in the forthcoming monetary policy, it added.
Notably, FFC, SRVI, NBP, PSO, and LUCK collectively contributed 355 points to the index. Conversely, profit-taking in HBL, ENGRO, MTL, and MEBL led to a deduction of 132 points, as per the report.
Another brokerage house Ismail Iqbal Securities also attributed to the positive close to the significant decline in cut-off yields.
“This suggests that investors are anticipating another rate cut in the upcoming MPC meeting,” it said.
On Wednesday, bullish sentiments dominated the PSX, driven by optimism surrounding the potential approval of Pakistan’s $7-billion Extended Fund Facility (EFF) by the International Monetary Fund (IMF) and strong corporate earnings.
In a key development, Prime Minister Shehbaz on Thursday said he would announce a five-year economic programme in the coming weeks.
Speaking at the Buna-Raast connectivity project, the prime minister emphasised that the ‘home-grown economic programme’ envisions strategies to revitalise the economy by improving agriculture, information technology, and unlocking other untapped sectors.
“Recently, we have been able to finalise its broad parameters. By next week or so, we will finalise it. I will go to the people to announce this programme,” the prime minister said.
Mentioning the Buna-Raast connectivity project, the PM said the initiative was significant as it would expand the reach of Pakistan’s digital payment infrastructure.
In its notice to the PSX, Pakistan Refinery Limited (PRL), a subsidiary of the Pakistan State Oil Company Limited (PSO), posted a remarkable turnaround as its profit-after-tax clocked in at Rs4.06 billion in the financial year ended on June 30, 2024.
Pakistan’s conglomerate Engro Corporation Limited (ENGRO) posted a consolidated profit-after-tax of Rs5.07 billion for the three months that ended June 30, 2024, a massive decline of over 61% as compared to Rs13.03 billion recorded in the same period of the previous year, showed the company’s financial results posted at the PSX.
Meanwhile, Millat Tractors Limited (MTL), Pakistan’s largest tractor manufacturer, said it had ceased production after the government failed to issue mechanism for payment of refund claims.
Globally, European and Asian stock markets rose on Thursday on growing optimism that the US Federal Reserve will cut interest rates next month.
Stock markets in Tokyo and Hong Kong closed higher while London, Paris and Frankfurt were up in early afternoon deals after Wall Street finished in the green on Wednesday.
The dollar has been under pressure from expectations of lower rates, though it pared down some losses against the euro.
The Pakistani rupee registered a minor decline against the US dollar, depreciating 0.05% in the inter-bank market on Thursday. At close, the currency settled at 278.67, a loss of Re0.15 against the US dollar.
Volume on the all-share index jumped to 804.26 million from 552.56 million on Tuesday.
The value of shares also increased to Rs16.97 billion from Rs14.59 billion in the previous session.
WorldCall Telecom was the volume leader with 140.91 million shares, followed by Kohinoor Spinning with 91.35 million shares, and Power Cement with 51.62 million shares.
Shares of 473 companies were traded on Thursday, of which 261 registered an increase, 138 recorded a fall, while 74 remained unchanged.
Source: Brecorder
