Corporate buybacks, solid earnings lift stocks higher

Stocks closed higher on Friday after a rangebound session, as strong financial results and corporate buybacks kept investors’ interest alive in the market, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index increased by 148.18 points or 0.35 percent to 42,241.98 points against 42,093.80 points recorded in the last session. The highest index of the day remained at 42,323.84 points while the lowest level of the day was recorded at 41,963.55 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed higher on rupee stability and speculations over the outcome of IMF review on federal budget plans.” Strong financial results and payouts, and corporate share buyback commitments had played a catalyst role in a bullish close, he added.

KSE-30 index also rose 48.78 points or 0.32 percent to 15,407.93 points compared with 15,359.15 points recorded in the last session. Traded shares dropped by 77 million shares to 178.164 million shares from 255.265 million shares. The trading value decreased to Rs5.768 billion from Rs9.268 billion. Market capital expanded to Rs6.356 trillion from Rs6.354 trillion. Out of 352 companies active in the session, 151 closed in green, 170 in red and 31 remained unchanged. Nabeel Haroon, analyst at Topline Securities, said a range-bound session was observed at the exchange as the index traded between its intraday high of 117 points and intraday low of 131 points to finally close at 42,210 level (up by 0.28 percent).

A major contribution to the index came from HUBC, ENGRO, SNGP, OGDC and BAFL, as they cumulatively attributed 130 points to the index. On the flip side, DAWH, SYS, HBL, PAKT and PKGS lost value to weigh down on the index by 199 points.

The highest increase was recorded in Nestle Pakistan shares, which rose by Rs208.62 to Rs5,890 per share, followed by Bhanero Tex., which increased by Rs79.74 to Rs1,143.50 per share. A significant decline was noted in Rafhan MaizeXD, which fell by Rs192.50 to Rs8,300 per share, followed by Pak Tobacco, which decreased by Rs24.30 to Rs660.70 per share.

Brokerage Arif Habib Ltd said the business week finished on a high note at the PSX. “The market opened in the green, but investor engagement remained low due to the weekend, making the index fluctuate in both directions. However, as the second session resumed, bulls became active in the market by pushing the bourse to reach an intraday high of 229.49 points, increasing volumes significantly, as investors added value to the portfolio by cherry-picking strong fundamental stocks,” it reported. “Cement and banks remained in the limelight.”

Sectors contributing to the performance included commercial banks (+56.6 points), power generation and distribution (+56.0 points), fertiliser (+28.0 points), E&P’s (+24.7 points), and OMC’s (+18.9 points).

WorldCall Telecom remained the volume leader with 17.014 million shares, which closed lower by one paisa to Rs1.21 per share. It was followed by Sui North Gas with 13.671 million shares, which closed higher by Rs2.51 to Rs43.42 per share.

Other significant turnover stocks included TPL Properties, Bank Al-Falah, Air Link Commun, Faysal Bank, Maple Leaf, Sui North Gas, Bankislami Pak., and Fauji Foods Ltd. Shares’ turnover in the future contracts dropped to 41.528 million shares from 64.669 million shares.