PSX Surges on Circular Debt Breakthrough

Muhammad Haris

The rally at the Pakistan Stock Exchange was mostly dictated by the happenings on the circular debt resolution where most of the scrips recorded a gain on back that release of funds to help improve the dividend cycle of the E&P companies.

The work has been done to resolve the circular debt by Rs 1250 billion which would help the release of Rs 556 billion funds to OGDC, Rs126 billion to PPL, and Rs 29 billion to PSO. With an expectation of hefty dividend payouts from E&Ps led to a run-up in the respective stock prices.Stock Market Loses over 1000 Points Amid Tension with Iran

However, the political environment remained heated with aggressive election campaigns and public appearances by key political leaders across the country.

Furthermore, there was a notable decline in cut-off yields for the 3-month, 6-month, and 12-month MTBs by 50bps, 56bps and 62bps respectively.

During the week the rupee closed at 279.59 against the dollar, showing an appreciation of Rs 0.30 or 0.11%. The 100 index closed at 63,813 points, climbing up by 531 points or 0.84 percent during the outgoing week

“We expect the KSE-100 index to be positive in the coming week on the back of robust financial results in the ongoing result season”, said Tahir Abbas, head of research at Arif Habib.

Additionally, the upcoming monetary policy announcement which is due on 29th Jan’24 will be a key event to look out for, he said. The script continues to trade at attractive levels, which could further entice investors

The KSE100 index is expected to remain in a thin range during the next week as SBP’s MPS meeting will be held on 29th Jan-24 it is expected that the policy rate will remain unchanged amid inflationary pressure, said Abdul Azeem, head of research at Spectrum Securities.

However any cut in the policy rate would generate a healthy rally in the market, he said.

Moreover, the extraordinary results of listed companies can also have a positive impact on the market. “We prefer fundamentally strong shares with healthy dividend yields mainly to exploration and fertilizer companies”, said Abdul Azeem.