Bears leave the PSX field for bulls to take over

The benchmark KSE-100 Index at the Pakistan Stock Exchange (PSX) on Tuesday gained 796.10 points, or 1.26%, just two days ahead of the general elections. 

According to the PSX website, the KSE-100 Index closed at 63,799.01 level. 

During the intraday trading, peaks outnumbered troughs, reflecting investors’ confidence in the equity market. 

The oil and gas sector displayed more gains than losses, mainly due to the caretaker government’s discussions with the IMF regarding the circular debt settlement. 

Mari Petroleum’s share price increased by Rs 77.73 during intraday trading. The company revealed earnings per share (EPS) of Rs 281.14, up from Rs 178.87 in the first six months of the ongoing financial year compared to the same period of last year.

Mari Petroleum declared an interim cash dividend of Rs 98 per share. Consequently, the higher return on equity and improved profitability appear to be drawing more equity investors. 

“Notably, within the E&P sector, OGDC (+5.71%) and PPL (+5.39%) saw increases, buoyed by news of the caretaker government’s formal discussions with the IMF to settle gas circular debt to the tune of around Rs1.2 trillion. In the banking sector, MCB (0.94%) disclosed its FY23 results, revealing an EPS of Rs 50.32 and cash dividend of Rs 9.0 per share. Activity in the cement sector was also observed, with DGKC (+2.64%), LUCK (+1.08%), and CHCC (+1.05%), closing higher than the previous day’s figures, partly due to the drop in international coal prices to $US94 per ton”, said Topline Securities. 

Market moguls are hoping for more gains in the equity market in the post-election period. Political stability and a better business environment can further contribute to higher gains at PSX.

“In the election week, the index is in a converging range with the election result expected to move the index +/-7-10%”, said Arif Habib Limited.

Therefore, the rally in shares at the PSX could receive a boost from the elections, and investors who have recently bought shares during dips may see higher returns in the coming weeks.