Stocks inch up by 49 points amid profit-taking in a mixed session

KARACHI: Stocks witnessed mixed activity on Thursday and saw some profit-taking at intra-day highs but maintained the positive close to another new all-time high index.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 share Index increased by 49.13 points or 0.06 per cent to 80,282.80 points against 80,233.67 points recorded in the last session. The highest index of the day remained at 80,888.86 points while the lowest level was recorded at 80,134.89 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed higher as investors weigh the IMF’s staff-level agreement in weeks after the MoF points to addressing all the federal budget requirements for a bailout.”He said speculations for SOEs’ strong corporate payouts and deliberations over privatization played a catalyst role for the new record close.

However, midsession pressure remained on reports of FTSE Russell reclassification of Pakistan to frontier market status in conjunction with the FTSE Global Equity Index Series and the FTSE Frontier Index Series September 2024 index reviews, and the weakening rupee.

The KSE-30 index slightly decreased by 7.58 points or 0.03 per cent to 25,791.82 points against 25,799.40 points.Traded shares decreased by 40 million shares to 496.782 million shares from 536.580 million shares. The trading value dropped to Rs19.328 billion from Rs22.722 billion. Market capital expanded to Rs10.612 trillion against Rs10.593 trillion. Of 446 companies active in the session, 188 closed in green, 194 in red and 64 remained unchanged.

Naveed Nadeem, an analyst at Topline Securities, said equity market experienced a mixed day. The KSE-100 index reached an intraday high of 80,887 points and an intraday low of 80,135 points. Profit-taking was observed at these levels, with the index ultimately settling the day at 80,283 points, reflecting a gain of 49 points or 0.06 per cent.

Key contributors to the market’s performance were the cement, banks, food, and exploration sectors, led by companies like LUCK, FABL, MEBL, NATF, and POL, collectively adding 147 points to the index.

The highest increase was recorded in Unilever Pakistan Foods Limited shares, which rose by Rs96.14 to Rs18,258.64 per share, followed by Philip Morris (Pakistan) Limited, which increased by Rs54.43 to Rs718.14 per share. A significant decline was noted in Nestle Pakistan Limited, which fell by Rs60.02 to Rs7,000.39 per share, Pakistan Engineering Company Limited followed it, which closed lower by Rs22.54 to Rs650 per share.

Brokerage Arif Habib Ltd stated the KSE-100 index continued to show strong support around the 80,000-point level on Thursday, signalling a structurally bullish trend. In a significant development, Pakistan has been reclassified to frontier market (FM) status from secondary emerging market (EM) by FTSE Russell.

This reclassification follows Pakistan’s placement on the FTSE Russell watchlist last year and will take effect on September 23, 2024, with the rebalance occurring on September 20. The FTSE reclassification aligns with the MSCI’s earlier decision in 2021 to reclassify Pakistan to FM status.

Analysts do not anticipate major market disruptions from the FTSE reclassification, given the prior MSCI adjustment. Although FTSE has not yet allocated a specific weight to Pakistan in the FM space, it is expected to be significantly larger than the current 0.05 per cent allocation across 14 stocks in the FTSE Emerging All Cap Index.

Market participants are eagerly awaiting the weight allocation to determine whether the market should expect inflows or outflows as a result of the reclassification. BO Punjab remained the volume leader with 29.276 million shares which closed higher by 13 paisas to Rs5.53 per share. PIA Holding Company followed it with 26.706 million shares, which closed higher by Rs1.52 to Rs18.46 per share.

Other significant turnover stocks included Pak Elektron, Hascol Petrol, Agritech Limited, K-Electric Ltd., AKD Securities L, WorldCall Telecom, National Bank XD and PTCL.In the futures market, 304 companies recorded trading, of which 132 increased, 161 decreased and 11 remained unchanged.