Stocks eke out gain as earnings roll in

Stocks closed higher on Thursday on an earnings season rally and some cooling off on the political front after the government decided to hold dialogue with Pakistan Tehreek-e-Insaf over a date for same-day elections in the country, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed higher by 364.33 points or 0.89 percent to 41,463.91 points against 41,099.58 points recorded in the last session. The highest index of the day remained at 41,525.01 points while the lowest level of the day was recorded at 41,078.22 points.

“Stock surged in the earnings season rally at PSX on speculations over PM [Prime Minister] seeking a vote of confidence from the NA [National Assembly] and improving economic indicators after current account surplus in Mar’23,” Ahsan Mehanti, analyst at Arif Habib Corp said.

He added that the rupee stability and speculations over surging China investment in CPEC projects had played a catalyst role in the bullish activity. KSE-30 index also increased by 73.47 points or 0.48 percent to 15,367.80 points compared with 15,294.33 points recorded in the last session.

Traded shares dropped by 17 million shares to 169.105 million shares from 186.900 million shares. The trading value increased to Rs6.248 billion from Rs5.781 billion. Market capital expanded to Rs6.258 trillion from Rs6.213 trillion. Out of 342 companies active in the session, 175 closed in green, 141 in red and 26 remained unchanged.

Ali Najib, analyst at Topline Securities, said it was a positive day for Pakistan equities. “The KSE100 index mostly remained in the green zone and eventually settled at 40,448 (+364 points; up 0.89 percent) for the day.”

He was of the view that the aforesaid buying momentum could be attributed to cooling off on the political front where Chief Justice of Pakistan remarks with regards to the initiation of political dialogues among political parties without any direction or timeline from the court.

During trading hours, DAWH, MARI, UBL, PSEL & MEBL added 190 points, cumulatively. On the flip side, BAHL, HBL and PPL witnessed some profit-taking as they lost 41 points collectively.

The highest increase was recorded in Nestle PakistanXD shares, which rose by Rs133.98 to Rs5,333.98 per share, followed by Sapphire Fiber, which increased by Rs72.78 to Rs1,043.29 per share. A significant decline was noted in Premium Tex., which fell by Rs31.46 to Rs443.53 per share, followed by Towellers Limited, which decreased by Rs16.75 to Rs206.66 per share.

Brokerage Arif Habib Ltd said a bullish trend at the PSX continued. “The benchmark KSE-100 index opened with positive momentum and continued to trade in green throughout the day, reaching an intraday high of 419.84 points, as investors’ participation remained active due to positive outcomes on the political front,” it reported.

Volumes picked up as above-expected financial results were announced by the banking, technology, and cement sector, boosting investor confidence to accumulate strong fundamental stocks and leading the index to close in green.

Sectors contributing to the performance included inv. banks/inv. cos. / securities cos. (+71.7 points), commercial banks (+58.5 points), cement (+47.2 points), E&P’s (+43.9 points), and fertilizer (+30.1 points).

Bank Al-Falah remained the volume leader with 14.264 million shares which closed higher by 20 paisas to Rs29.46 per share. It was followed by Maple Leaf with 7.264 million shares, which closed higher by 64 paisas to Rs27.61 per share.

Other significant turnover stocks included Pak Refinery, WorldCall Telecom, Treet Corp, K-Electric Ltd., Aisha Steel Mill, TPL Properties, Lotte ChemicalXD, and Summit Bank. Shares’ turnover in the future contracts dropped to 214.640 million shares from 271.856 million shares.