Budget 2014 propels bourse to record high

Karachi Stock Exchange’s benchmark 100-share index gained 1.94% or 433.15 points to end at 22,757.72 point level.

KARACHI: The country’s largest stock market witnessed a post-budget rally, closing at another record high, driven by blue chip stocks. Investors welcomed the new budget where the government announced a cut in corporate taxes by a percentage point and pledged resolution of the circular debt issue in 60 days.

The benchmark KSE-100 index continued to defy gravity, and was the only stock market in the region that gained today after regional markets went red on concerns of a cut down in stimulus measures by central banks.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 1.94% or 433.15 points to end at 22,757.72 point level. Trade volumes rose to 471 million shares compared with Wednesday’s tally of 352 million shares. The value of shares traded during the day was Rs12.4 billion.

“Investors ignored the bloodbath in the region and remained aggressive buyers primarily in cements, oil and gas, and the energy sector as higher public spending and assurance of resolution of the circular debt issue gave birth to positive sentiments,” reported Faisal Bilwani, analyst at Elixir Securities.

Banking sector that does not gain much from the budget announcement rallied, nevertheless, along with the broader market as fears of higher taxes were laid to rest.

Shares of 386 companies were traded on Thursday. At the end of the day 214 stocks closed higher, 127 declined while 45 remained unchanged.

Bank of Punjab (rights issue) was the volume leader with 66.31 million shares gaining Rs0.79 to finish at Rs3.44. It was followed by Fauji Cement with 52.74 million shares gaining Re1 to close at Rs12.78 and Pakistan Telecommunication Company with 35.11 million shares climbing Rs1.03 to close at Rs23.5.

Foreign institutional investors were net buyers of Rs730 million, according to data maintained by the National Clearing Company of Pakistan.