Benchmark KSE-100 Index Loses 233 Points, or 0.27% WoW, Settles at 85,250
Our Correspondent
KARACHI: The Pakistan Stock Exchange (PSX) extended its bull-run and soared to a record high above 86,000 points during the outgoing week. However, profit-taking at high valuations erased earlier gains, and the KSE-100 index closed with a marginal decline of over 200 points.
Despite the fall in average trading volumes, local investors remained active, offsetting foreign selling and demonstrating their confidence in market fundamentals.
Key Highlights
The highlight of the week that triggered the rush towards record highs was the successful holding of the Shanghai Cooperation Organisation (SCO) summit in Islamabad, which enhanced bilateral cooperation with China across various sectors, including security and technology.
The summit coincided with the inauguration of Gwadar International Airport, strengthening ties between the two nations.
On the economic front, large-scale manufacturing (LSM) output contracted 2.6% year-on-year (YoY) in August, alongside the widening of the trade deficit to $1.8 billion in September.
The central bank’s reserves rose past $11 billion, while Pakistan Investment Bond (PIB) yields dropped significantly, reflecting a further reduction in borrowing costs for businesses in the coming months.
Market Movements
- Monday: Profit-taking drove stocks downwards by over 200 points due to political uncertainty and foreign fund outflows.
- Tuesday: The market made a strong rebound, driven by the surge in blue-chip stocks and renewed investor confidence during the ongoing corporate earnings season.
- Wednesday: The KSE-100 reached a new record high, spurred by easing political noise and speculation about economic commitments at the SCO summit.
- Thursday: PSX succumbed to profit-taking and came down from record highs, as political noise, uncertainty about judicial reforms, and foreign outflows dampened investor sentiment.
- Friday: Continuing the previous trend, profit-takers dominated proceedings, pulling the index down by 335 points.
Weekly Summary
The benchmark KSE-100 index closed the week with a marginal decline of 233 points, or 0.27% week-on-week (WoW), settling at 85,250.
JS Global analyst Wadee Zaman noted that the KSE-100 remained flat during the outgoing week, posting a marginal loss of 0.3%. Average volumes dropped 15% WoW to 442 million shares. Foreigners sold shares worth $12 million, which was offset by buying from local companies and mutual funds.
Sector and Economic Updates
During the week, Pakistan successfully hosted the SCO summit, where Pakistan and China agreed to further enhance bilateral cooperation in multiple sectors including security, education, agriculture, and science and technology. The inauguration of Gwadar International Airport during the Chinese prime minister’s visit was another significant event.
Among other news, the government proposed halting payments to 18 independent power producers (IPPs) with a total production capacity of 4,267 megawatts, following the termination of five other IPPs’ contracts.
In a T-bills auction, the government raised Rs716 billion with a slight dip of five basis points in the six-month yield. It also raised Rs181 billion through the sale of PIBs, where cut-off yields fell significantly across different tenors.
Meanwhile, the State Bank’s reserves increased by $215 million to $11 billion, according to the JS analyst.
Arif Habib Limited (AHL) reported that the bull-run persisted at the PSX during the outgoing week, with the index reaching a record high above 86,000 points on Wednesday. The rally was fuelled by investor optimism surrounding the SCO summit.
On the economic front, LSM output recorded a 2.6% YoY decline in August, though it saw a recovery of 4.7% month-on-month. Additionally, Pakistan’s trade deficit widened 24% YoY to $1.8 billion in September. Yields in the recent PIB auction registered a sharp drop, with two-year PIBs falling 74 basis points.
The Pakistani rupee depreciated against the US dollar by Rs0.02, or 0.01% WoW, closing at Rs277.6.
Sector Performance
Negative Contribution:
- Commercial banks (293 points)
- Power generation (131 points)
- Fertilizer (95 points)
- Cement (65 points)
- Paper and board (28 points)
Positive Contribution:
- Refineries (93 points)
- Tobacco (82 points)
- Engineering (65 points)
- Pharmaceutical (49 points)
- Automobile assemblers (34 points)
Foreigners’ selling continued during the week, clocking in at $11.6 million compared to net selling of $22.6 million last week, AHL added
