PSX witnesses bullish momentum 3rd day in a row
Bulls continued to dominate the trade floor for a third consecutive day on Wednesday as shares at Pakistan Stock Exchange (PSX) crossed the 86,000 milestone in intraday trade.
The benchmark KSE-100 index climbed 502.18 points, or 0.59 per cent, to stand at 86,166.15 points from the previous close of 85,663.97 points at 12:44pm.However, the index closed at 85,669.27 points, up by 5.30 points, from the previous close.
Awais Ashraf, director research at AKD Securities, stated that investors were “optimistic about an improving investment climate, fueled by high expectations for positive outcomes” from the upcoming visit of the Saudi delegation.
“Additionally, concerns about external account pressures stemming from oil price volatility have been alleviated by higher remittance figures for September,” he highlighted, adding that this helps stabilise the external account.
Ashraf recommended that “investors continue purchasing stocks with exposure to structural reforms, potential for Foreign Direct Investment (FDI), and those poised to benefit from monetary easing”.
“Despite KSE-100 making a new high of 86,454 in today’s trading session, Pakistan equities are still cheaper on valuations as market is currently trading at PE [price-to-earning] ratio of 3.7 and providing dividend yield of 12.7pc,” he noted.
Yousuf M Farooq, director research at Chase Securities, said, “The market is rerating upwards on the back of lower yields on fixed income instruments with a lot of interest in oil and gas companies”.
Last week, the government had rejected all bids for three-month treasury bills but raised money close to the target and much below the maturity amount at the auction. After a long gap, the rejection of all bills at the Sept 18 auction had also caused yields to fall substantially.
On the interest in oil and gas companies, Farooq noted that last quarter’s results showed that receivables were “no longer piling up” and circular debt was not accumulating.
Yesterday, stocks had also rallied on news of a high-level Saudi delegation, led by Minister for Investment Khalid Bin Abdulaziz Al-Falih, set to visit Pakistan from Oct 9 (today) to October 11 to boost economic ties between the two countries.
The optimism had been reflected in the increasing share prices of companies like Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), Pakistan State Oil (PSO) and Pakistan Refinery Limited (PRL).
Earlier, Prime Minister Shehbaz Sharif also confirmed that the country was scheduled to sign agreements worth around $2 billion with the visiting Saudi delegation.
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