Karachi, October 17, 2024 – The Pakistan Stocks witnessed a sharp decline on Thursday as the benchmark KSE-100 index plunged by 620 points amid profit-taking, closing at 85,585 points.
This marked a -0.72% drop from the previous day’s all-time high of 86,205 points, as investors opted to book profits following a record surge in the index.
Market analysts at Topline Securities Limited noted that the sell-off at Pakistan stocks was primarily driven by profit-taking in the banking and exploration & production (E&P) sectors. These two sectors collectively weighed down the index by 348 points. “After yesterday’s record close, investors were keen to lock in gains, particularly in the banking and E&P sectors, which contributed significantly to the index’s fall today,” said an analyst.
Trading Activity and Market Leaders
Despite the sharp fall at the Pakistan stocks, trading volume remained robust, with 513 million shares changing hands, reflecting continued investor activity. The total value of shares traded amounted to Rs 21.6 billion. Pakistan Refinery Limited (PRL) led the trading volumes with 58 million shares traded. PRL’s strong performance was linked to news of a $1 billion investment agreement with a Chinese corporation for its upgradation project, boosting investor interest.
Sector Performance and Company Announcements
The profit-taking trend was particularly visible in the banking sector, which saw a decline following strong performance in recent sessions. The E&P sector also saw significant losses, further weighing down the overall Pakistan stocks.
Several companies announced their financial results for the September quarter on Thursday, which provided mixed signals to the market:
• PAEL (Pak Elektron Limited): Reported earnings per share (EPS) of Rs 0.52 for 3Q2024, reflecting a 7% year-on-year (YoY) increase but a sharp 54% quarter-on-quarter (QoQ) decline. Earnings came in lower than market expectations, contributing to subdued sentiment around the stock.
• BAFL (Bank Alfalah Limited): Reported an EPS of Rs 8.42 for 3Q2024, marking a 50% YoY and 11% QoQ rise. The bank also declared an interim dividend of Rs 2 per share. Despite the solid earnings and dividend announcement, profit-taking led to pressure on the stock as investors looked to cash in gains. Earnings were slightly higher than industry expectations.
• DGKC (D.G. Khan Cement): Reported an EPS of Rs 1.84 for 1QFY25, showing a 22% YoY increase. The company’s earnings exceeded expectations, providing some resilience against broader market declines.
Outlook
Analysts expect that while profit-taking may continue in the near term, the overall market sentiment remains positive, with strong corporate earnings, foreign investment interest, and stable economic indicators supporting future growth. However, investors are likely to remain cautious, especially in sectors that have experienced sharp recent gains.