Karachi-Strong earnings reports from cement, banking, and pharmaceutical companies fueled a continued stock market rally on Thursday. Investor confidence surged, driving significant buying in these sectors, while other sectors traded within a narrower range.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index gained 396.72 points, or 0.35%, to close at 113,739.15 points.
Reflecting renewed optimism, the capital market surged to an intraday high of 114,202.13 before profit-taking pulled it down to a session low of 113,525.89 points.
Ahfaz Mustafa, CEO of Ismail Iqbal Securities, attributed the market’s gains to solid corporate results, saying: “The market is trading up on stellar results by cement, banking, and pharma companies.”
He added, “Large volumes are witnessed in these companies driving the index up, while the other sectors are range-bound.”
In the latest Market Treasury Bill (T-bill) auction on Wednesday, the government raised Rs259 billion, falling short of the Rs350 billion target. The auction also failed to meet the Rs371 billion maturity amount, indicating liquidity constraints and cautious investor sentiment ahead of the upcoming IMF (International Monetary Fund) review.
Yields increased across all tenors, with the three-month T-bill yield rising by three basis points (bps) to 11.83%, the six-month yield increasing by 17 bps to 11.67%, and the 12-month yield climbing by 6 bps to 11.65%.
Market analysts believe the rise in T-bill yields suggests investor concerns over inflation and interest rate expectations. The increase in yields comes despite falling inflation, as investors remain watchful of Pakistan’s economic outlook and upcoming monetary policy decisions.
Investor sentiment received a boost from Habib Bank Limited (HBL) and United Bank Limited (UBL), which reported strong financial results for the fourth quarter of CY24.
HBL posted a consolidated profit after tax (PAT) of Rs14.6 billion (EPS: Rs9.8), compared to Rs15.9 billion (EPS: Rs10.1) in the same period last year.
The bank’s net interest income (NII) stood at Rs60.3 billion, reflecting a 6% year-on-year (YoY) and 5% quarter-on-quarter (QoQ) decline due to lower asset yields. However, non-markup income surged by 76% YoY and 69% QoQ, driven by strong fee income and gains on securities.
UBL reported even more impressive results, announcing a consolidated PAT of Rs26 billion (EPS: Rs21.3), nearly doubling from Rs13.5 billion a year ago.
The bank’s NII surged by 84% YoY and 32% QoQ to Rs68.2 billion, benefiting from a strong investment portfolio and increased loan volumes. Non-markup income also rose by 158% YoY and 64% QoQ, primarily due to elevated gains on securities, though fee income declined by 39% QoQ.
The banking sector’s stellar performance reinforced investor confidence. This optimism contributed to increased buying interest in financial stocks, further lifting the overall market sentiment.
The PSX closed in positive territory on Wednesday, continuing its earnings-driven rally. The benchmark KSE-100 Index gained 253.96 points, or 0.22%, closing at 113,342.44, up from 113,088.48 points in the previous session.
The market touched an intraday high of 114,029.76, reflecting continued investor interest in select sectors, while the lowest level recorded was 113,060.26.
