Record-breaking run continues as stocks close past 74,000 level

Stocks soared to a fresh all-time high on Tuesday, capping a record-breaking streak that's seen the market scale new heights almost daily, as investors bet on a successful outcome from talks with the International Monetary Fund (IMF) on a new loan program and hopes of Saudi investment, sending records tumbling like dominoes.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed higher by 732.08 points or 0.99 percent to close at 74,531.19 points. The highest index of the day remained at 74,575.31 points while the lowest level was recorded at 73,977.01 points. The KSE-30 index increased by 330.74 points or 1.40 percent to 23,954.42 points.

“Stocks closed all-time high in the pre-budget rally at the PSX as investors weigh expectations of $8bn new IMF loan deal by July, Saudi agreement for four years and easing SBP policy from June,” said analyst Ahsan Mehanti at Arif Habib Corp.

He said that expectations over deliberations over the privatisation of SOEs, resolve over Pakistan-IMF loan talks and SBP revised forecast for 3.5 percent growth for FY25 played a catalytic role in the record close.

Traded shares decreased by 147 million shares to 574.182 million shares from 721.597 million shares. The trading value dropped to Rs23.425 billion from Rs25.649 billion. Market capital expanded to Rs10.037 trillion against Rs9.958 trillion. Of 388 companies active in the session, 190 closed in green, 178 in red and 20 remained unchanged.

Ali Najib, an analyst at Topline Securities, said market momentum remained buoyant as investors welcomed initiation of dialogue between Pakistan Government & the IMF regarding forthcoming EFF program.

"Encouraging Auto Sales numbers for April showing early signs of the industry’s turnaround on the back of stability on the rupee front and anticipation of monetary easing kept the automobile sector on investors’ radar throughout the trading hours," Najeeb said. In addition, prospects of a reduction in domestic petroleum product prices in the next review (fortnightly review schedule for Wednesday evening) kept the bears at bay as this decline would further cool down the inflationary environment in the months to come.

The highest increase was recorded in Ismail Industries Limited shares, which rose by Rs96.28 to Rs1,385.57 per share, followed by Mari Petroleum Company Limited, which increased by Rs73.68 to Rs2,792.28 per share. A significant decline was noted in Nestle Pakistan Limited, which fell by Rs94.42 to Rs7,306.58 per share, followed by Rafhan Maize Products Company Limited, which closed lower by Rs59.43 to Rs7,962 per share.

Muhammad Rizwan, an analyst at Chase Securities, said this remarkable surge was primarily propelled by robust performances from the exploration & production and banking sectors, which collectively contributed 512 points to the overall gain.

"Within the E&P sector, stocks experienced gains ranging from one percent to 2.5 percent, fuelled by investor optimism regarding the potential resolution of circular debt within the IMF Program," Rizwan said.

"Additionally, news of a price increase of 30 to 50 rupees for cement in the North region bolstered certain North-based players, with CHCC, FCCL, and GWLC closing up by 1.5 percent, 0.5 percent, and 7.48 percent respectively."

However, the end of the fertilizer gas price subsidy on feed and fuel prices for Fatima and AGL led investors to reduce their positions, resulting in declines of 2 percent and 2.5 percent respectively for these stocks. Conversely, other fertilizer companies such as EFERT and FFC, expected to benefit from this development, closed up by 4.3 percent and 0.3 percent respectively.

Anticipation surrounding the MSCI rebalancing acted as a catalyst for the market, as the potential for enhanced the PSX performance relative to other markets within the MSCI Frontier basket may lead to an increase in PSX market weight, consequently attracting higher foreign inflows.

Cnergyico PK remained the volume leader with 35.483 million shares which closed lower by 11 paisas to Rs4.63 per share. WorldCall Telecom followed it with 29.894 million shares, which closed lower by 4 paisas to Rs1.44 per share.

Other significant turnover stocks included K-Electric Ltd., Pak Elektron, Fauji Foods Ltd., OGDCL, XD, TPL Properties, The Searle Company, Ghani Glo Hol and Kohinoor Spining. In Future Market, 318 companies recorded trading, of which 167 increased, 147 decreased and 4 remained unchanged.