Karachi, July 19, 2023 – Pakistan’s stock market witnessed an increase of 86 points on Wednesday, with the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closing at 45,095 points, compared to the previous day’s closing of 45,009 points.
The market traded cautiously in a narrow band throughout the day.
Banking Sector Rallies on UBL’s Bumper Dividend Announcement
Analysts at Topline Securities noted that it was the second successive session where the market successfully defended the 45,000 level, with bulls managing to close the day’s trading at 45,095 points, marking a gain of 86 points or 0.19 percent.
READ MORE: KSE-100 Index Maintains Level of 45,000 Amidst Volatility
Investor sentiment remained cautious during the trading hours, with the KSE-100 index fluctuating in a narrow range of 300 points, experiencing both gains and losses. The caution was attributed to the release of the IMF Staff Report, which outlined performance criteria and structural reforms for the ongoing Stand-By Arrangement (SBA) program, addressing the risks highlighted for the country.
In terms of interest rates, market participants are leaning towards a possible “100bps” hike from the current “Status Quo,” following the release of the IMF Staff Report. According to the Topline MPS Survey results, 48 percent of the participants expect the policy rate to remain unchanged, while 52 percent anticipate a 100bps increase.
READ MORE: Pakistan Stocks End Down by 25 Points in Range-Bound Activity
The June quarter result season has begun, and United Bank Limited (UBL) surprised the market by announcing a bumper dividend of Rs. 11 for the second quarter in a row. This announcement further fueled the banking sector’s stock prices, with most of the sector’s stocks rallying after UBL’s announcement. As a result, the banking sector contributed positively to the market gains, with a rise of 272 points.
On the other hand, Colgate-Pamolive emerged as a major laggard, with its stock closing at 1498.43 (a decline of Rs. 121.49 or 7.5 percent) after experiencing a significant rally of over 100 percent in the past two months.
READ MORE: Weekly Review: Pakistan Stocks May Undergo Corrective Trend
The total market volume stood at 243.3 million shares (a decrease of 4 percent from the previous day) and the value of transactions reached Rs. 9.3 billion (an increase of 27 percent from the previous day). WTL led the volume chart, witnessing over 18 million shares changing hands on the day.
The market’s cautious trading and the impact of the IMF Staff Report will continue to be closely monitored by investors and analysts in the coming days. The performance of key sectors, especially banking, and the overall market sentiment will play a crucial role in shaping the market’s future direction.
