Stocks gain 357 points amid Moody’s upgrade

KARACHI: Stocks regained ground as the index increased 357 points on Thursday amid Moody’s Ratings upgrade and hopes for the approval of the IMF’s extended fund facility for Pakistan.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 share index increased by 356.88 points or 0.46 per cent to 78,349.66 points against 77,992.79 points recorded in the last session. The highest index of the day remained at 78,513.86 points while the lowest level was recorded at 78,017.36 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed bullish on Moody’s Ratings upgrade to Caa2 and raising outlook to positive on reduced default risk.”He said falling bond yields and greater certainty on Pakistan’s external source financing ahead of the IMF board approving the EFF of $7 billion played a catalyst role in the bullish close.

The KSE-30 index increased by 123.38 points or 0.5 percent to 24,885.64 points against 24,762.26 points.Traded shares decreased by 37 million shares to 599.820 million shares from 636.024 million shares. The trading value rose to Rs20.41 billion from Rs16.267 billion. Market capital expanded to Rs10.447 trillion against Rs10.404 trillion. Of 449 companies active in the session, 227 closed in green, 166 in red and 56 remained unchanged.

Naveed Nadeem, an analyst at Topline Securities, said the stock market surged by 357 points, or 0.46 percent, ending the day at a strong 78,350. The index exhibited notable volatility, reaching a peak of 78,514 and dipping to 78,017 points during the session.

The rally was fuelled by significant gains in heavyweights such as MTL, Engro, NBP, COLG, and HUBC, contributing to a substantial 427-point increase.The highest increase was recorded in Unilever Pakistan Foods Limited, which rose by Rs241.02 to Rs17,581.02 per share, followed by Colgate-Palmolive (Pakistan) Limited, which increased by Rs87.97 to Rs1,218.17 per share. A significant decline was noted in Al-Abbas Sugar Mills Limited, which fell by Rs29.22 to Rs565.79 per share; Mari Petroleum Company Limited followed it, which closed lower by Rs21.56 to Rs3,368.32 per share.

Brokerage Arif Habib Ltd stated that the KSE-100 index continues to find support around the 78,000 level, signalling the potential formation of a bottom. In a significant development, NBP reported an extraordinary item of Rs49 billion in 2QCY24 related to the settlement of a long-standing pension case.

This one-time item equates to a per-share impact of Rs12 (after tax). Since 2016, the bank had suspended dividend payouts due to the ongoing pension case, which resulted in a substantial increase in the bank’s capital adequacy ratio (CAR) and Tier-1 CAR from 16.5 per cent and 12.3 per cent in CY16 to 24.85 per cent and 18.7 per cent in 1QCY24, well above the minimum regulatory requirements, stated the brokerage.

Looking ahead to CY25, NBP is expected to deliver improved earnings of Rs18.5 per share, free from one-time charges, which could lead to a higher dividend payout. A base case projection anticipates a 50 per cent payout, or Rs9 per share, reinforcing NBP’s appeal as a solid investment backed by strong fundamentals.

While the index shows signs of stabilization, the rally lacks momentum. The participation of cement stocks is crucial to provide the necessary strength to sustain and build on these gains.Symmetry Group Ltd remained the volume leader with 64.297 million shares which closed higher by Re1 to Rs8.57 per share. National Bank XD followed it with 42.591 million shares, which closed higher by Rs4.73 to Rs57.53 per share.

Other significant turnover stocks included Kohinoor Spinning, Secure Logistics Gro, Air Link Commun, WorldCall Telecom, Agha Steel Ind, Fauji Foods Ltd, Dewan Cement and Hascol Petrol.In the futures market, 336 companies recorded trading, of which 169 increased, 160 decreased and 7 remained unchanged.