The Pakistan Stock Exchange (PSX) made a strong recovery on Friday after a period of intense selling, with the KSE-100 index soaring by over 3,000 points. Investors returned to the market, encouraged by a combination of positive economic factors and government actions.
Analysts credited the rally to several key developments, including the government’s plans to privatize state-owned enterprises (SOEs), the resolution of issues related to independent power producers’ (IPPs) capacity payments, growing exports, rising foreign exchange reserves, and the stability of the Pakistani rupee.
Despite facing pressure in the previous three trading sessions, investors saw the market dip as an opportunity, especially with the anticipation of a further reduction in the policy rate.
Analyst Insights
Ahsan Mehanti of Arif Habib Corp remarked that stocks closed on a bullish note, with broad-based activity driven by strong valuations. The government’s progress on SOE privatization, along with the resolution of the IPPs’ contract issues, contributed to investor optimism. Additionally, economic indicators such as the surge in exports, increased forex reserves, and the stabilization of the rupee played pivotal roles in the market’s recovery.
The benchmark KSE-100 index gained 3,238.17 points, or 3.05%, to settle at 109,513.15 points by the end of the trading session.
Market Review
Topline Securities highlighted the market’s turnaround after three consecutive days of losses. The KSE-100 index saw a significant rebound, as investors took advantage of the market dip, anticipating a low interest rate environment with the possibility of another policy rate cut.
Leading the traded value were Mari Petroleum (Rs5.95 billion), Pakistan State Oil (Rs2.73 billion), Hub Power (Rs2.58 billion), Attock Refinery (Rs1.51 billion), and Fauji Fertiliser Company (Rs1.46 billion). Fauji Fertiliser Company, Mari Petroleum, Systems Limited, Hub Power, UBL, MCB Bank, and Bank Alfalah contributed significantly to the index’s gains, adding a combined 1,587 points.
Key Market Movements
Arif Habib Limited (AHL) noted that despite the overall market surge, the KSE-100 index recorded a 4.2% weekly decline, marking its most notable drop since December 2023. On Friday, 87 stocks closed higher, while 13 saw declines. Fauji Fertiliser Company (+3.94%), Mari Petroleum (+5.96%), and Systems Limited (+8.5%) were the top contributors to the index’s gains. Conversely, Pakistan Services (-2.2%), EFU General Insurance (-5.14%), and Indus Motor (-0.76%) were the biggest detractors.
JS Global analyst Muhammad Hasan Ather observed that the KSE-100 index’s recovery of 3,238 points followed a significant drop of 4,795 points the day before. He attributed the rebound to a sense of stabilization after recent heavy selling, with investors regaining confidence. The market had undergone a healthy correction after a strong rally in prior weeks.
Trading Volumes and Foreign Investment
Overall trading volumes decreased to 754.9 million shares, down from 1.17 billion shares the previous day. A total of 459 companies were traded, with 281 stocks closing higher, 119 falling, and 59 remaining unchanged.
WorldCall Telecom was the volume leader, with 99.9 million shares traded, gaining Rs0.08 to close at Rs1.6. Pace (Pak) Limited followed with 43.3 million shares traded, gaining Rs0.96 to close at Rs7.19, and K Electric saw 40.6 million shares traded, gaining Rs0.1 to close at Rs5.32.
Foreign investors sold shares worth Rs414.9 million, according to the NCCPL report.
Outlook
Despite recent volatility, analysts remain optimistic about the market’s prospects, citing positive economic developments and the potential for continued growth. The recent rate cuts, along with government measures to address structural issues, are expected to support a market recovery in the near term.
