PSX climbs to new peak above 138,000
The Pakistan Stock Exchange (PSX) continued its bullish run on Thursday as the benchmark KSE-100 index soared past the 138,000 milestone for the first time in history, backed by deep investor interest and robust performance by heavyweight sectors.
Stock buying was observed across the board, with notable strength in auto, cement, fertiliser and energy sectors. The momentum was driven primarily by institutional activity and the upbeat macroeconomic outlook.
Among energy categories, oil and gas exploration, oil marketing, power generation and refining led the charge, pushing the index higher. Banking names like United Bank and National Bank also contributed significantly, while improved volumes and positive cues helped sustain investor interest. The index touched intra-day peak of 138,943.47 before settling at 138,665.50 at close, up sharply by 2,285.53 points, or 1.68%.
Arif Habib Corp MD Ahsan Mehanti commented that stocks closed at an all-time high, driven by broad-based gains amid unconfirmed reports of a potential US president's visit on September 18, which was expected to strengthen bilateral trade ties.
"Optimism about the resolution of tax issues through government-businessmen talks and improving economic indicators also supported the record rally at the PSX," he added.
KTrade Securities, in its market wrap, wrote that the PSX experienced a strong session, with the KSE-100 index gaining 2,286 points (+1.68%) to close at a new all-time high of 138,665.
The rally was led by strength in fertiliser, banking and technology sectors, where notable contributions came from Fauji Fertiliser, United Bank, Engro Fertilisers, Systems Ltd, Engro Holdings, Hub Power, Habib Bank and Lucky Cement, it said.
JS Global analyst Muhammad Hasan Ather stated that the historic rally at the PSX was driven by aggressive buying in energy, oil, fertiliser and pharmaceutical sectors, which was further fuelled by expectations of rate cut in the upcoming monetary policy committee meeting.
Investor sentiment was also lifted by a breakout from the three-day consolidation. While short-term profit-taking may emerge, the medium-term outlook remains bullish as economic recovery gains pace, liquidity improves and corporate earnings stay resilient, Ather forecast.
Arif Habib Limited (AHL) observed that the KSE-100 index posted strong gains after testing support levels earlier in the week and edged closer to the 139,000 mark.
Some 80 shares rose while 20 declined, with major gains coming from Fauji Fertiliser (+2.92%), United Bank (+2.82%) and Engro Fertilisers (+5%). On the flip side, Bank AL Habib (-0.86%), Thal Limited (-3.37%) and Habib Metropolitan Bank (-1.15%) were the biggest drags, it said.
In corporate news, Pakistan Services (+10%) received an offer for 28% voting shares from AKD Group Holding. On the diplomatic front, Pakistan and El Salvador formally established bilateral relations, with particular focus on cryptocurrency collaboration, AHL mentioned.
Among top stocks held by mutual funds, Oil and Gas Development Company (OGDC), Pakistan Petroleum Ltd (PPL) and Pakistan State Oil (PSO) led the list.
OGDC topped with 62 mutual funds collectively holding 17.2% of its free float. PPL followed with 51 funds owning 15.5%, while PSO ranked third, held by 50 funds representing 29.7% of its free float. As the market heads into the final trading session of the week, the KSE-100 index is up 3.25% so far in the week, it concluded.
Topline Securities, in its review, remarked that after catching their breath for two sessions, the bulls stormed back onto the trading floor, taking the benchmark KSE-100 index to intra-day high of 2,563 points before closing at a mighty 138,665, up 2,286 points.
The rally was driven by heavy institutional flows, with local investors stepping in to scoop up, reigniting market momentum. Fertiliser stocks stole the limelight as the sector's giants posted hefty gains and contributed 563 points to the index, Topline mentioned. Overall trading volumes increased to 780 million shares as compared to Wednesday's tally of 706 million. The value of shares traded was Rs40 billion. Shares of 486 companies were traded. Of these, 306 stocks closed higher, 154 dropped and 26 remained unchanged.
Pakistan International Bulk Terminal led the volumes chart with trading in 82.7 million shares, rising Rs0.4 to close at Rs10.09. It was followed by First Dawood Properties with 42.5 million shares, gaining Rs0.89 to close at Rs7 and Ghani Chemworld with 26 million shares, higher by Rs1.18 to close at Rs13.21. Foreign investors sold shares worth Rs350.4 million, the National Clearing Company reported.
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Share of profit from UBL, despite posting 74.64 percent growth in 2023, couldn't offset the huge finance cost which dampened the bottomline growth to 16.14 percent in 2023. Net profit stood at Rs.11,891.698 million in 2023 with NP margin of 13.55 percent. EPS grew to Rs.19.94 in 2023. In 2024, BWCL posted 18.44 percent year-on-year growth in its topline which clocked in at Rs.103,922.26 million. During the year, the volume of the overall cement industry dwindled by 5 percent to clock in at 38.2 million tons. This was due to depressed politico-economic backdrop of the country. The cement sector found its safe haven in the export sales, which mounted to 54 percent to clock in at 7.1 million tons. This was due to Pak Rupee depreciation which made the Pakistani cement attractive to the international buyers. Talking about BWCL, it registered 6 percent higher sales volume during the year which was recorded at 6.96 million tons in 2024. This was due to the instigation of two new manufacturing lines at Hattar and Mianwali. Improved volumes coupled with increased selling prices enabled the company to record 17.98 percent higher gross profit in 2024 with GP margin staying intact at 31 percent. Distribution expense surged by 35 percent in 2024 on account of higher freight & handling charges mainly due to improved export volumes. Administrative expense escalated by 52.80 percent in 2024 due to higher payroll expense. This was despite the fact that BWCL streamlined its workforce from 2128 employees in 2023 to 1979 employees in 2024. Other expense ticked up by 14 percent in 2024 due to increased provisioning done for WWF. Other income deteriorated by 52 percent in 2024 due to considerably thinner income recognized on short-term investment and lower gain recorded on the disposal of property, plant & equipment. BWCL recorded 12.36 percent uptick in operating profit in 2024 with OP margin ticking down to 27.80 percent. Although the company discharged a considerable portion of its external borrowings in 2024, high discount rate resulted in 64.21 percent elevated finance cost in 2024. Share of profit of equity accounted investee grew by 26.50 percent in 2024 particularly on the back of profit from UBL. Net profit improved by 15.78 percent to clock in at Rs.13,768.575 million in 2024 with EPS of Rs.23.09 and NP margin of 13.25 percent. Recent Performance (9MFY25) During the period under review, BWCL's net sales ticked up by 2.42 percent to clock in at Rs.81,999.478 million. Competitive international pricing and increased global demand led to 28.1 percent higher export volumes of the local industry, which clocked in at 6.5 million tons. Conversely, local sales of the overall cement industry dipped by 6.6 percent to clock in at 27.5 million tons due to higher interest rates, taxes and construction cost. BWCL also recorded 4.5 percent dip in its sales volume which clocked in at 5.17 million tons in 9MFY25. Cost of sales plummeted by 5.11 percent due to depressed dispatches as well as the company's increasing inclination towards the use of alternate energy. However, with price optimization, the company was able to drive its gross profit up by 20.35 percent in 9MFY25 with GP margin recorded at 34.73 percent versus GP margin of 29.56 percent posted in 9MFY24. Distribution and administrative expense mounted by 26.52 percent and 32.96 percent respectively in 9MFY25 due to inflationary pressure. Higher profit related provisioning appears to be the cause of 57.58 percent higher other expense recorded in 9MFY25. However, it was conveniently offset by 139.40 percent higher other income posted during the period. Operating profit picked up by 21.13 percent in 9MFY25 with OP margin clocking in at 31.50 percent versus OP margin of 26.63 percent recorded during the same period last year. Monetary easing coupled with lower outstanding liabilities at the end of the period resulted in 26.42 percent decline in finance cost in 9MFY25. Finance cost was offset by 113.11 percent progress exhibited by the share of profit of equity accounted investee in 9MFY25. BWCL's net profit clocked in at Rs.17,541.45 million in 9MFY25, up 69.98 percent year-on-year. This translated into EPS of Rs.29.42 in 9MFY25 versus EPS of Rs.17.31 recorded in 9MFY24. NP margin also posted a phenomenal growth from 12.89 percent in 9MFY24 to 21.39 percent in 9MFY25. Future Outlook With the improvement in macroeconomic indicators, construction activity is expected to pick up. However, sustained period of high inflation and discount rate coupled with higher taxation, energy cost and duties will suppress the margins as many cement companies may not be able to pass on the onus of cost hike to their customers owing to fierce competition in the industry. However, since BWCL is one of the lowest cost producers, it may be able to sustain its margins and profitability.
