PSX rebounds after three-day decline, investors eye earnings season

• Market rebounds, closes at 113,206, up 1.54%.
• KSE-100 Index hits intraday high of 113,400.56 points.
• Benchmark index touches low of 111,805.66 points.

The capital market witnessed a rebound on Thursday, snapping a three-day losing streak as investors took advantage of attractive valuations following a deep correction.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index  closed at 113,206.40, up 1,719.04 points (1.54%) from the previous session’s close of 111,487.36. The highest index of the day was recorded at 113,400.56 points, while the lowest level was recorded at 111,805.66 points.

Ahfaz Mustafa, CEO of Ismail Iqbal Securities, commented on the recovery, saying: "Market, after a deep correction is recovering, sustainability is still to be seen, but the dull activity is due to investors awaiting key results over the next few days."

Despite the rebound, concerns remain over whether the market can sustain its upward momentum, with investors closely monitoring corporate earnings and macroeconomic indicators.

Fauji Fertilizer Company (FFC) announced its Q4 2024 financial results, posting an unconsolidated quarterly profit of Rs14 billion (EPS: Rs9.94), a 90% year-on-year (YoY) increase. However, analysts at Topline Securities noted that the results were below industry expectations.

The company declared a quarterly cash dividend of Rs21 per share, bringing the total cash dividend for 2024 to Rs34.86 per share, with a payout ratio of 76.6%.

For the full year 2024, FFC recorded earnings of Rs64.7 billion (EPS: Rs45.49), marking a 118% YoY increase from Rs29.6 billion (EPS: Rs20.85) in 2023. However, earnings saw a 42% quarter-on-quarter (QoQ) decline, largely due to a Rs4 billion impairment loss on a subsidiary and a 46% drop in other income due to lower interest rates.

Additionally, the expected Rs2.5 billion dividend income from FFBL Power Company did not materialise during the quarter, adding to investor disappointment.

On Monday, Pakistan Oilfields Limited (POL) reported a profit after tax of Rs10,142 million (EPS: Rs35.73) for H1FY25, representing a 42% YoY decline. The drop was primarily attributed to higher exploration expenses linked to a dry well recorded during the period.

On a quarterly basis, the company's net profit for Q2FY25 stood at Rs7,573 million (EPS: Rs26.68), down 4% YoY. POL announced an interim cash dividend of Rs25 per share for Q2FY25, consistent with its payout in the same period last year.

Investors are keeping a close eye on macroeconomic indicators, including interest rate trends, inflationary pressures, and ongoing IMF commitments. Market analysts expect cautious trading in the coming sessions as more corporate results are released.

The KSE-100 Index fell for the third consecutive session on Wednesday amid selling pressure related to futures contract rollover activity. The benchmark index closed at 111,487.36, marking a 543-point loss (-0.48%) from the previous session’s 112,030.36.