Stocks close higher in pre-budget rally

The stock market eked out gains on Friday amid a pre-budget rally as investors chose to add value to their portfolios by cherry-picking stocks on hopes of some favourable outcomes from Budget FY24, traders said. The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed higher by 217.75 points or 0.52 percent to 41,904.21 points against 41,686.46 points recorded in the last session. The highest index of the day remained at 41,931.83 points while the lowest level of the day was recorded at 41,677.14 points. Ahsan Mehanti, an analyst at Arif Habib Corp, said, “Stocks showed recovery in the pre-budget rally at PSX led by cement and industrials on govt projections for 3.5 percent growth in FY24 and proposed Rs950 billion federal PSDP allocations.”

He said expectations of the status quo in the State Bank policy rate announcement next week and the IMF-friendly federal budget had played a catalyst role in a bullish close. KSE-30 index also increased by 61.47 points or 0.42 percent to 14,803.83 points compared with 14,742.36 points recorded in the last session. Traded shares decreased by 39 million shares to 164.835 million shares from 203.789 million shares. The trading value decreased to Rs5.195 billion from Rs5.848 billion. Market capital expanded to Rs6.401 trillion from Rs6.372 trillion. Out of 340 companies active in the session, 187 closed in green, 126 in red and 27 remained unchanged.

According to Nabeel Haroon, an analyst at Topline Securities, investor participation declined as investors preferred to remain on the sidelines before the budget announcement for FY24. Major positive contributions to the index came from COLG, SYS, TRG, OGDC and ILP, as they cumulatively contributed 153 points to the index. On the flip side MARI, HBL, UPFL, NESTLE and FFC lost value to weigh down on the index by -64 points. The highest increase was recorded in Colgate Palm shares, which rose by Rs135.12 to Rs1,936.67 per share, followed by Khyber Textile, which increased by Rs42.25 to Rs625 per share. A significant decline was noted in Unilever Foods, which fell by Rs1,266.32 to Rs21,932.68 per share, followed by Allawasaya Tex, which decreased by Rs224 to Rs2,764 per share.

Brokerage Arif Habib Ltd said the week had concluded with a positive session at the PSX Friday. “The market opened in the green and maintained the sentiment throughout both sessions,” it reported. “In expectations of favourable outcomes from the upcoming budget, investors choose to add value to their portfolios by cherry-picking stocks.” Substantial volumes had been observed across the board, with third-tier equities being in the spotlight, it added. Sectors contributing to the performance included synthetic & rayon (+7.2 points), cement (+3.6 points), chemical (+0.8 points), inv. banks/inv. cos. /securities cos. (+0.6 points) and commercial banks (+0.5 points).

TPL Properties remained the volume leader with 19.508 million shares which closed higher by 49 paisas to Rs13.32 per share. It was followed by Unity Foods Ltd with 13.968 million shares, which closed higher by 34 paisas to Rs15.50 per share. Other significant turnover stocks included WorldCall Telecom, Faysal Bank, Hascol Petrol, Sui North Gas, Oil & Gas Dev., Loads Limited, Pak Petroleum and TRG Pak Ltd. Shares’ turnover in the future contracts decreased to 48.533 million shares from 73.056 million shares.