Market watch: Bourse rises 156 points, crosses 40k mark on mini-budget hopes

Benchmark index gains 0.39% to settle at 40,057.85

KARACHI: Optimism prevailed at the stock market on Wednesday, helping the KSE-100 index gain 156 points and cross the 40,000-point mark as investors pinned all hopes on the mini-budget announcement due later in the day.

Pakistan's $3-billion loan agreement with the United Arab Emirates (UAE), which would provide cushion for Pakistan's critical balance of payments position, aided investor sentiments, resulting in the KSE-100 index rising for the fourth consecutive session.

In the mini-budget, the government removed the withholding tax on banking transactions for filers of tax returns, scrapped 0.02% advance tax on the sale and purchase of shares and announced other incentives to boost exports and improve the ease of doing business.

Earlier, trading began on a positive note at the bourse and the index climbed nearly 300 points in the early hours. However, speculation over the mini-budget erased some of the gains but the index still managed to close above 40,000 points.

Except for fertiliser, buying activity was witnessed across all the index-heavy sectors.



At the end of trading, the benchmark KSE 100-share Index recorded an increase of 155.64 points, or 0.39%, to settle at 40,057.85.

Elixir Securities' analyst Murtaza Jafar said equities continued to rally with the KSE-100 index rising 156 points on optimism over expected incentives in the mini- budget, particularly for the stock market.

"The market activity remained dull with traded volumes at $41 million, up 5%," he added. "However, automobile stocks remained in the limelight over possible developments in the supplementary budget and policy implementation to tighten imports."

Honda Atlas Cars (+5%), Pak Suzuki Motor Company (+5%) and Indus Motor (+2.91%) all gained value.

Honda is scheduled to announce its financial results on Thursday. Elixir Research estimates that it will post earnings per share of Rs6.2 in the Oct-Dec quarter, down 38% year-on-year and 14% quarter-on-quarter.

"With budget expected later in the day, possible incentives for the stock market will likely galvanise investors' interest," the analyst added.



Overall, trading volumes increased to 179 million shares compared with Tuesday's tally of 136.8 million. The value of shares traded during the day was Rs7.34 billion.

Shares of 365 companies were traded. At the end of the day, 210 stocks closed higher, 127 declined and 28 remained unchanged.

K-Electric was the volume leader with 14.98 million shares, losing Rs0.01 to close at Rs6.62. It was followed by The Bank of Punjab with 13.76 million shares, gaining Rs0.12 to close at Rs13.18 and TRG Pakistan with 11 million shares, gaining Rs0.32 to close at Rs26.25.

Foreign institutional investors were net buyers of Rs732.65 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.