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PSX weekly review: KSE-100 index posts highest weekly gain in two years

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3 years ago

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  • Benchmark KSE-100 index surges 4.9% during the week.
  • Gains come on the back of clarity on the political front.
  • A weekly rally of a similar extent was last witnessed in April 2020.

KARACHI: The outgoing week proved to be an outstanding one for the stock market as it recorded phenomenal gains on the back of clarity on the political front.

The KSE-100 index surged 4.9%, marking the highest week-on-week increase in two years, to settle at 46,601 points. A weekly rally of a similar extent was last witnessed in April 2020.

In the outgoing week, the market roared back after political clarity emerged. Following Prime Minister Shehbaz Sharif’s oath-taking ceremony, the new coalition government began work to tackle the economy.

Moreover, the rupee recovered against the dollar at a rapid pace, marking a 3.6% appreciation. Additionally, the country received record-high remittances this month clocking in at $28.3 billion, showing a 28% increase month-on-month, on account of Ramadan and Eid.

Other major developments during the week were: SBP’s reserves slip below $11 billion, banks approved Rs180 billion in housing loans, Pakistan Telecommunication Authority (PTA) renewed mobile operator licence for $486 million, cars’ sales surged 53.78% in nine months, Rs1 billion Islamic finance facility for renewable energy power plants, weekly inflation witnessed the biggest rise since November.

Meanwhile, foreign buying was witnessed this week, clocking in at $1.29 million against a net sell of $3.78 million recorded last week. Buying was witnessed in technology ($2.21 million), and fertiliser ($1.16 million).

On the domestic front, major selling was reported by a mutual fund ($9.89 million), followed by insurance companies ($7.76 million).

During the week under review, average volumes clocked in at 477 million shares (up by 213% week-on-week), while average value trade settled at $66.3 million (up by 135.6% week-on-week).

Major gainers and losers of the week

Sector-wise positive contributions came from commercial banks (+395 points), fertiliser (+292 points), technology and communication (+268 points), cement (+241 points), and refinery (+129 points). On the flip side, negative contributions came from real estate investment trust (-2.19 points), and vanaspati and allied industries (-1.55 points).

Scrip-wise major gainers were Engro Corporation (+152 points), TRG Pakistan (+136 points), Meezan Bank (+122 points), HBL (+85 points) and Systems Limited (+80 points). Meanwhile, major losers were Colgate-Palmolive (-14 points), Faysal Bank (-10.88 points), Fatima Fertilisers (-4.74 points), Allied Bank (-3.18 points), and Dolmen City REIT (-2.19 points).

Outlook for next week

A report from AHL predicted: “We expect the market to remain positive in the upcoming week. With the commencement of the result season and clarity on the political front, certain sectors and scrips are expected to stay under the limelight.”

“Furthermore, we are expecting the rollover of Chinese loans worth $2.3 billion and IMF negotiations, will help bolster our foreign exchange reserves.,” it said, adding that any dip in oil prices should also have a positive impact on the equity bourse.

“The KSE-100 is currently trading at a PER of 5.0x (2022) compared to the Asia-Pacific regional average of 11.5x while offering a dividend yield of 8.3% versus 2.6% offered by the region,” the brokerage house stated.

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Business

Dar chairs the CCOP meeting; Blue World’s bid offer of Rs.10 billion is rejected.

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2 days ago

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The Foreign Minister/Deputy Prime Minister chaired the Cabinet Committee on Privatization meeting.

Other committee members who attended the conference included the Federal Secretaries of several Divisions, the Ministers of Finance and Revenue, Industry and Food, Commerce, Power, and Privatization.

The CCOP took the PC Board’s recommendation into consideration and suggested that Blue World’s bid of 10 billion rupees for the sale of 60% of PIACL’s shares be rejected. The bid was rejected by the CCOP, who chose to follow the PC Board’s advice.

The government’s determination to sell out PIACL through government-to-government or privatization was reaffirmed by the CCOP.

The CCOP was pleased with the Aviation Division’s evaluation of PIACL’s sound financial standing.

Additionally, the CCOP established a committee, chaired by the Minister of State for Finance, to assess potential transaction possibilities for the privatization of the Roosevelt Hotel and the appropriate modes of adoption in light of existing legal rules.

Prior to its subsequent meeting, the CCOP also ordered that all difficulties be resolved and an agreement for the selling of services to an international hotel be concluded.

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The KSE-100 Index has surged by 790 points, resulting in an all-time peak for the stock exchange.

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The benchmark KSE-100 Index increased by 790 points, marking a new all-time high for the Pakistan Stock Exchange (PSX) at 94,982 points.

The record-breaking performance underscores a surge of optimism and investor confidence in the stock market.

As investors responded to favorable economic signals, the market experienced a significant increase of over 500 points in early trading. Later, the KSE-100 Index reached another record level of 94,786 points after adding 594 points to its upward trajectory.

This positive development comes as the State Bank of Pakistan’s (SBP) foreign exchange reserves saw an increase of $84 million, reaching $11.26 billion during the week ending November 8, according to data released by the central bank on Thursday.

This represents an increase of 0.75% from the previous week. In addition, the nation’s total liquid foreign reserves experienced a modest increase, increasing by $33.7 million or 0.21% week-on-week to $15.97 billion.

In contrast, commercial banks’ reserves experienced a decline of $50.3 million or 1.06%, ultimately settling at $4.71 billion.

Furthermore, the economic team of Pakistan has expressed confidence in the discussions with the International Monetary Fund (IMF). Minister of State for Finance Ali Pervaiz Malik, in an exclusive conversation with Samaa TV, claimed talks were moving in a positive direction.

Highlighting improvements in Pakistan’s economic conditions, Malik noted substantial progress over the past six months to a year. He emphasized that Pakistan’s current economic situation has seen significant enhancement, with a reduced current account deficit of only $100 million in the first quarter, a reflection of the government’s strategy to increase remittances and boost exports.

Malik shared that discussions with the IMF are primarily focused on external financing, and while there have been speculations about a potential mini-budget or an increase in the petroleum levy, he clarified that these are currently premature considerations.

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Positive IMF negotiations propel KSE-100 Index above 94,000 points

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3 days ago

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As a result of investors’ optimism about the reported progress in the continuing talks with the International Monetary Fund (IMF), the Pakistan Stock Exchange (PSX) experienced a robust surge.

The benchmark KSE-100 Index of the PSX, which tracks market sentiment, rose 713 points to a new record high of 94,068 points, breaking above the 94,000-point barrier, as the trading session began.

Early in the day, the stock market began its upward trajectory as the KSE-100 Index steadily rose, gaining 574 points to reach 93,932 points. A possible agreement with the International Monetary Fund (IMF) might lead to more fiscal stability and back Pakistan’s economic reforms, which is why investors are so optimistic about the country’s future.

Officials from the Federal Board of Revenue (FBR) informed the International Monetary Fund (IMF) on Wednesday that the government would not be introducing a mini-budget and would instead continue to aim to collect Rs12,970 billion in taxes each year.

In line with continuing discussions with the Fund, FBR sources revealed that petroleum goods will not be subject to the General Sales Tax (GST).

The fact that Pakistan’s tax-to-GDP ratio has increased from 8.8% to 10.3%, a 1.5% gain viewed as a favorable sign of Pakistan’s fiscal policies, has reportedly pleased the IMF, who has voiced satisfaction at Pakistan’s recent economic performance.

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