The capital market witnessed a sharp rally on Thursday, extending its bullish momentum as strong earnings reports from the cement, banking, and pharmaceutical sectors fueled aggressive buying.
Investor confidence surged as these sectors saw significant capital inflows, while other segments remained largely stable.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index gained 396.72 points (0.35%), closing at 113,739.15 points.
Reflecting renewed optimism, the market surged to an intraday high of 114,202.13 points before profit-taking brought it down to a session low of 113,525.89 points.
Ahfaz Mustafa, CEO of Ismail Iqbal Securities, attributed the market’s gains to strong corporate earnings. He said, “The market is trading up on stellar results by cement, banking, and pharma companies.”
He further noted, “Large volumes are being witnessed in these companies, driving the index up, while other sectors remain range-bound.”
In Wednesday’s Market Treasury Bill (T-bill) auction, the government raised Rs259 billion, falling short of the Rs350 billion target. The auction also failed to meet the Rs371 billion maturity amount, signaling liquidity constraints and cautious investor sentiment ahead of the upcoming IMF review.
Yields rose across all tenors, with the three-month T-bill yield increasing by three basis points (bps) to 11.83%, the six-month yield rising by 17 bps to 11.67%, and the 12-month yield climbing by 6 bps to 11.65%.
Market analysts believe the increase in T-bill yields reflects investor concerns over inflation and interest rate expectations. Despite falling inflation, investors remain cautious about Pakistan’s economic outlook and future monetary policy decisions.
Investor sentiment received a boost from Habib Bank Limited (HBL) and United Bank Limited (UBL), which reported strong fourth-quarter earnings for 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.
UBL’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, mainly due to higher gains on securities, though fee income declined by 39% QoQ.
The banking sector’s strong performance further reinforced investor confidence, driving increased buying in financial stocks and lifting overall market sentiment.
The PSX closed in positive territory on Wednesday as well, continuing its earnings-driven rally. The KSE-100 Index gained 253.96 points (0.22%), closing at 113,342.44 points, up from the previous session’s 113,088.48 points.
The market touched an intraday high of 114,029.76 points, reflecting continued investor interest in select sectors, while the lowest level recorded was 113,060.26 points.
