Shares at PSX rally 480 points over ‘clarity’ on govt formation

Published February 28, 2024
Trading activity at PSX on Wednesday. — Phot via PSX data portal
Trading activity at PSX on Wednesday. — Phot via PSX data portal

Shares at the Pakistan Stock Exchange (PSX) traded in the green on Wednesday as stocks gained nearly 500 points, with analysts attributing the rally to “robust results” of companies and “clarity” on government formation.

The KSE-100 index gained 507.79, or 0.8 per cent, to stand at 63,726.88 at 11:46am from the previous close of 63,219.09. It closed at 63,703.44, up by 484.35 or 0.77pc.

Tahir Abbas, head of research at Arif Habib Limited, attributed the market’s positive momentum to “robust results and dividend announcement by the companies”.

“The profitability and dividends of KSE-100 index companies surged by 64pc YoY (year-on-year) and 40pc YoY respectively during the December ending quarter,” he said.

He further said that the formalisation of the provincial governments and clarity on the federal government also propelled investor confidence.

Shahab Farooq, director of research at Next Capital Limited, attributed the upward trajectory to “diminishing political uncertainty and an upward movement in international bonds of Pakistan”.

Furthermore, he said that the reports of China rolling over $2 billion of debt had also fueled positive sentiments in the stock exchange.

Sana Tawfik, deputy head of research at Arif Habib Limited, observed an upward trajectory in the refinery sector “on the back of refinery policy news”. Additionally, the fertiliser sector also witnessed a spike in anticipation of the price hike, she said.

She said the outlook was overall “positive” as the country progressed towards the formation of a new government — a crucial factor for negotiating a new International Monetary Fund (IMF) programme.

Additionally, she said that reports of the Chinese loan rollover also helped market sentiment.

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