KARACHI: The bulls tightened their grip in the outgoing short week as they staged a surprise rally on the eve of Eidul Fitr, tossing the benchmark KSE 100 index to a new peak.

It was the fourth record-breaking session at the end of Ramazan, a new trend for the PSX, which usually sees low volume and lacklustre activities in the holy month.

According to Topline Securities Ltd, the KSE 100 index is at an all-time high and has experienced a sharp recovery with a remarkable 75 per cent increase in US dollar terms over the past nine months.

However, the picture differs for passive long-term investors. Since its peak in 2017, the brokerage noted that the index, when measured in US dollars, remains down by 50pc.

“This discrepancy underscores the impact of political and economic uncertainties on investment values. Hence, stock market investors in Pakistan must continually adjust their portfolios to seize opportune moments amidst fluctuating market conditions,” it added.

Arif Habib Ltd (AHL) said the market maintained its upward trajectory in the two-session week before the start of the Eid holidays, settling at an all-time high level above 70,000 points.

The positive sentiment stemmed from the agreement between Pakistan and Saudi Arabia during the prime minister’s visit to the kingdom to expedite the planned Saudi investment package worth $5bn.

Last year, Saudi Arabia promised to invest $25bn within the next five years under the Special Investment Facilitation Council (SIFC), seeking investments from Arab countries in the energy, IT, minerals, defence, and agriculture sectors.

The $5bn investment is expected in the minerals sector, especially Reko Diq gold and copper mines. Saudi Arabia has already been studying the prospects of tapping into this sector, though the kingdom is also interested in petroleum, agriculture, and IT.

Moreover, Pakistan’s government international bond of $1bn is set to mature on April 15. Furthermore, remittances increased by 16pc year-on-year to $2.95bn in March, the highest after April 2022. Additionally, the rupee remained unchanged at Rs277.94 against the US dollar.

As a result, the market closed at 70,315 points after adding 1,898 points or 2.77pc week-on-week.

Sector-wise positive contributions came from commercial banks (563 points), fertiliser (344 points), E&P (250 points), power (179 points) and OMCs (106 points).

Meanwhile, the sectors which mainly contributed negatively were automobile parts (4 points) and insurance (3 points).

Scrip-wise positive contributors were Fauji Fertiliser Company Ltd (352 points), Hub Power Company Ltd (176 points), Meezan Bank Ltd (172 points), United Bank Ltd (113 points) and MCB Bank (89 points). Meanwhile, scrip-wise negative contributions came from Engro Corporation (51 points), Dawood Hercules Corporation Ltd (45 points), Bank Alfalah Ltd (14 points), Interloop Ltd (5 points) and K-Electric Ltd (5 points).

Foreign buying continued, clocking in at $4.2m compared to a net $3.9m last week. Major buying was witnessed in the all-other sector ($3.2m) and commercial banks ($0.8m). On the local front, banks/DFIs reported selling ($4.9m), followed by individuals ($3.2m). The average volume jumped 18pc to 363m shares, and the average value traded rose to $59m.

AHL expects the market to remain positive in the coming week. Developments on the privatisation and new IMF programme fronts would further improve market sentiment.

Furthermore, the result season is expected to commence in the upcoming week, where certain scrips are anticipated to be in the limelight amid the expectation of robust results.

Published in Dawn, April 13th, 2024