TFD Stocks Overview

PSX gains all-time high status for 2nd week with 4.1pc gain

KARACHI: Pakistan Stock Exchange (PSX) closed the second consecutive week on a record high note on the back of improved economic outlook and positive indicators, with the benchmark index standing at all-time high of 55,391 points.
The benchmark KSE-100 Index gained 2,268 points (+4.1 percent) on a week-on-week (WoW) basis to close at 55,391 points from 53,123 points. The benchmark index had gained 2,179 points (+4.3 percent) on a week-on-week (WoW) basis in the preceding week to close at 53,123 points from 50,944 points. Similarly, the KSE All Share Index closed last week at 36,794.78 points, closing at its all-time high level in 6.5 years.
The market gurus have enlisted different factors for this achievement. They said that investors built extensive positions in attractive sectors in anticipation of a favourable outcome of the first review talks with the International Monetary Fund (IMF). Regarding fiscal matters, the IMF and the Federal Board of Revenue deliberated on making structural adjustments to tax collection, including the introduction of taxes on agriculture, real estate and retail sectors. Moreover, the Oil and Gas Regulatory Authority notified a substantial increase in the prices of natural gas from November 1, a prerequisite for the ongoing IMF review.
Meanwhile, cut off yields for the three, five and 10-year Pakistan Investment Bonds (PIBs) recorded a decrease of 180 basis points, 100 basis points and 15 basis points, respectively. The drop indicates that interest rates have peaked and will come down in the near future. Market players also took cue from a fall in bond yields during the week, which helped strengthen the bullish bias.
Another positive development of the week was an increase in workers’ remittances by 10 percent year-on-year and 12 percent month-on-month, which climbed up to $2.46 billion for the month of October. A decrease in global crude oil prices aided the market’s advance towards the north.
They said that investors also rejoiced over improved corporate profitability, and the government’s decision to raise gas tariffs, which is expected to boost the profitability of the energy sector. Earnings of listed companies rose 46 percent year-on-year in the first nine months of 2023 while the increase was a whopping 66 percent in the July-September quarter alone.
Similarly, higher dividends – up 42pc year-on-year in Jan-Sept 2023 – coupled with a share buyback spree in which listed companies have purchased their own
shares worth Rs41 billion since May 2022 also helped sustain the positive momentum.
In the week starting today (Monday), the Morgan Stanley Capital International (MSCI) is gearing up to conduct its semi-annual review of global stock markets and the results will be released on Tuesday (tomorrow).
The recent robust rally at the PSX has sparked optimism, indicating a favourable outcome in the review and paving the way for foreign investors to infuse fresh liquidity into the bourse. It is anticipated that Pakistan’s weight will further increase in the upcoming semi-annual index review, given the 21 percent boost in overall market capitalization and the 26 percent surge in the index.
Foreigners turned buyers during the week under review as they bought stocks valuing at $1.3 million compared to net selling of $1.4 million in the preceding week. Major buying was witnessed in banks ($1.4 million) and power companies ($1.2 million). On the local front, selling was reported by banks ($16.3m) and individuals ($7.2m).
Sector-wise, positive contributions came from commercial banking (447 points), cement (409 points), fertilizer (362 points), power generation and distribution (345 points) and exploration and production (147 points). The sectors that contributed negatively were closed-end mutual funds (4 points) and cable and electrical goods (2 points). – TLTP