Bourse extends gains on rating upgrade
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Pakistan Stock Exchange (PSX) on Tuesday continued its upward momentum as investors remained optimistic in the backdrop of positive triggers, particularly the upgrade of Pakistan's long-term foreign currency issuer default rating to "B-" with a stable outlook.
Analysts mentioned that a surge in global equities, alongside easing inflation and upbeat remittances data, drove the rally. The benchmark KSE-100 index, following continuous fluctuations, reached its intra-day high at 117,362 points after midday. Later, it started descending gradually and hit the day's low at 116,646 just before close. It ended the day with a gain of 385 points at 116,775.
According to Ahsan Mehanti of Arif Habib Corp, stocks closed higher in the earnings season rally amid reports of Fitch Ratings' upgrade of Pakistan's long-term foreign currency issuer default rating to "B-" with a stable outlook.
He added that surging global equities, upbeat remittances data and lower inflation played the role of catalysts in bullish close at the PSX. At the end of trading, the benchmark KSE-100 index recorded an increase of 385.47 points, or 0.33%, and settled at 116,775.50.
In its review, Topline Securities commented that the PSX ended on a strong note, with the KSE-100 index gaining 385 points. The positive momentum was supported by the stability in global markets and the onset of corporate results season, prompting investors to take fresh positions.
Gains were largely driven by key index movers including Engro Holdings, Lucky Cement, Oil and Gas Development Company, TRG Pakistan and Pakistan State Oil (PSO), which added 325 points, it said.
In its report, Arif Habib Limited (AHL) remarked that early gains failed to sustain above the 117,000 level and the "Monday Tariff Gap" continued to cap gains. Some 51 shares rose while 45 fell on KSE-100.
Lucky Cement (+1.58%), TRG Pakistan (+6.28%) and Oil and Gas Development Company (+1.08%) contributed the most to the index gains while Hub Power (-0.89%), Meezan Bank (-0.82%) and Mari Petroleum (-0.58%) were the biggest drags, AHL noted.
It added that Fitch upgraded Pakistan's long-term foreign currency debt rating to B- from CCC+. The upgrade reflects Fitch's increased confidence that Pakistan will sustain its recent progress on narrowing budget deficits and implementing structural reforms, supporting its IMF programme performance and funding availability.
Additionally, the government forecast production of 28.6 million tons of wheat, a decrease of 10.6% year-on-year. The brokerage house said that the "Monday Tariff Gap" between 117,600 and 118,600 points remained the key level for the current week.
JS Global analyst Muhammad Hasan Ather stated that KSE-100 continued its upward trajectory, rising 0.8% to reach the intra-day high of 117,362 amid strong trading volumes. It was fuelled primarily by record-breaking remittances of $4.1 billion and the SBP governor's projection of $14 billion in foreign currency reserves by June 2025.
Market sentiment received additional support from the Fitch rating upgrade. With improving external accounts and strong liquidity flows, "we expect continued positive momentum in the market, particularly in banking and export-oriented sectors", the analyst said.
Overall trading volumes decreased to 479.5 million shares compared with Monday's tally of 484.5 million. The value of shares traded during the day was Rs30.4 billion. Shares of 447 companies were traded. Of these, 219 stocks closed higher, 174 fell and 54 remained unchanged.
Cnergyico PK was the volume leader with trading in 32.1 million shares, falling Rs0.11 to close at Rs8.53. It was followed by TRG Pakistan with 21.5 million shares, gaining Rs4.01 to close at Rs67.90 and The Bank of Punjab with 20.8 million shares, falling Rs0.19 to close at Rs11.17. During the day, foreign investors sold shares worth Rs527 million, the National Clearing Company reported.
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