Thanks to investor interest in the energy and fertilizer industries, shares at the Pakistan Stock Exchange (PSX) started the year in the green.
At 12:43 PM, the benchmark KSE-100 index had risen 568.33 points, or 1.41 percent, to 40,988.78 points.
According to Raza Jafri, head of equity at Intermarket Securities, “a rise in urea prices is generating investor interest in the fertilizer industry, while hopes of circular debt resolution continue to support the energy sector.”
However, he went on to say that for the recovery to last, the market required some “assurance” on the balance of payments position.
According to Ahsan Mehanti of Arif Habib Corporation, the banking and oil sectors were the main drivers of the rally as investors considered the rise in global crude oil prices and the finance minister’s assurance that the IMF program would be completed and default avoided.
He said that the “bullish behavior was sparked by speculations ahead of corporate earnings reports and prospects for an early resolution to gas circular debt situation.”
The State Bank of Pakistan’s (SBP) recent move to lift restrictions on the import of necessities was also cited by former PSX director Zafar Moti as a factor in the stock market’s increase.
“This will lead to ease of doing business for importers and items that [were stuck] at the port will now be available in the market. Once poultry feed is imported, the prices of eggs and poultry will also reduce. This is good news for the market,” he added. Prices for urea fertilizer, which is in great demand right now for wheat harvests, have gone up by about 8%.
Engro Fertilizers Limited announced last week that starting on January 1, 2023, their brand of urea compost would be sold for Rs2,440 per 50kg bag, an increase of Rs190 per bag.
According to a corporate spokesperson, the rise was required due to growing production expenses. At 11:10 on Monday, shares of Engro Fertilisers Limited were up Rs3.44 or 4.47 percent.
Energy companies were also doing well, with shares of Sui Northern Gas Pipelines (SNGPL), Cynergyico Pk Limited, and Pakistan Petroleum Ltd (PPL) all rising by more than 4%, or Rs4.36 and 6.40%, respectively.
Following the establishment by the government of a commission for the settlement of circular debt in the gas sector, the energy sector was responsible for the index’s increase in the final few trading days of 2022.
The committee was given a deadline of three working days to complete its report by finance minister Ishaq Dar on December 29.
