KARACHI:
The Pakistan Stock Exchange (PSX) closed on a positive note on Friday, with the KSE-100 index surpassing 117,500 points, buoyed by strong earnings expectations from the banking and fertilizer sectors.
Investors were optimistic about an anticipated solid payout from banking stocks, a 58% year-on-year (YoY) increase in December urea sales, and potential cuts in the State Bank of Pakistan’s (SBP) policy rate. This drove the index to a 5.6% gain on a week-over-week (WoW) basis, continuing the positive momentum from 2024 into the new year.
Ahsan Mehanti, Managing Director of Arif Habib Corp, attributed the bullish trend to strong earnings projections for the banking and fertilizer sectors. He noted that the positive data on urea sales and the expectation of a policy rate cut helped lift investor sentiment.
By the end of trading, the KSE-100 index rose by 467.33 points, or 0.40%, reaching a closing level of 117,586.98 points. Arif Habib Limited (AHL) also reported a 5.6% week-over-week gain, highlighting the continuation of the market’s upward trend into January.
Of the stocks traded, 47 advanced while 52 declined. Engro Fertilisers (+9.46%), Fauji Fertiliser Company (+2.59%), and Dawood Hercules Corporation (+6.19%) were the leading contributors to the indexโs gains. In contrast, Lucky Cement (-3.75%), Systems Limited (-3.24%), and Pakistan Petroleum (-2.64%) acted as major drags.
The article also noted significant corporate developments, particularly in the restructuring of Dawood Hercules and Engro Corporation. Both companies are in the process of finalizing their restructuring under a Scheme of Arrangement, which has received regulatory and court approvals. Following the restructuring, Dawood Hercules will be split into two separate entities, one of which will hold the company’s 40% stake in Engro. Engro will then become a subsidiary of Engro Holdings, which will issue new shares based on an approved swap ratio.
Looking ahead, AHL remains positive about the market’s outlook for January, with the KSE-100 index expected to find support around 115,500 points.
Topline Securities noted that the KSE-100 opened on a negative note, mainly due to pressure in the cement sector. The index dropped by as much as 1,540 points, driven by disputes among cement manufacturers over market share and price adjustments. However, the market recovered in the second half of the session as investors bought stocks on dips, bringing the index back up to close at 117,587 points, up 0.4%.
The fertilizer sector was a major contributor to the indexโs performance, with Engro Fertilisers, Fauji Fertiliser, Dawood Hercules, and Engro collectively adding 911 points. Investor interest in the sector was driven by expectations of a 53% month-on-month increase in dispatch numbers for December 2024.
Total trading volume stood at 936 million shares, down from over 1 billion shares on Thursday, while the value of shares traded amounted to Rs39.6 billion. Shares of 456 companies were traded, with 167 closing higher, 246 lower, and 43 unchanged.
WorldCall Telecom led trading volumes with 73.2 million shares, closing at Rs1.70 after a loss of Rs0.09. Cnergyico PK and Fauji Cement followed, trading 57.3 million and 54.4 million shares, respectively.
Foreign investors were active, purchasing shares worth Rs299.7 million, according to the National Clearing Company of Pakistan Limited (NCCPL).
