Market watch: Foreigners continue to buy as stocks gain 231 points

Benchmark index rises 0.58% to settle at 40,289.16

KARACHI: The stock market remained bullish on Thursday for the fifth consecutive session as a result of pro-business measures announced by Finance Minister Asad Umar in second amendment to the Finance Bill 2019.

The KSE-100 index scaled to a high of 547 points as soon as trading began, led by banking, energy, cement and auto sectors. However, concerns over the circular debt of Rs807 billion, expected drop of Rs6.8 billion in government revenues in the wake of amendment to the finance bill and the power tariff hike approved by the National Electric Power Regulatory Authority (Nepra) put the market under pressure in midday trading.

Overall, the bailout packages announced by the United Arab Emirates (UAE), Saudi Arabia and China, and tax reforms in the mini-budget played the role of a catalyst in the bullish close of the market.

At the end of trading, the benchmark KSE 100-share Index recorded an increase of 231.31 points, or 0.58%, to settle at 40,289.16.



Elixir Securities' analyst Murtaza Jafar said equity investors cheered the supplementary budget announced on Wednesday. He said financial stocks took the lead in the day's gains with Habib Bank Limited (+2.35%), MCB Bank (+2.59%) and United Bank Limited (+1.2%) collectively contributing 115 points to the index on reported foreign buying, despite higher taxes on the sector.

The cement sector also staged a rebound with Lucky Cement (+2.07%), DG Khan Cement (+2.32%) and Maple Leaf Cement (+3.17%) drawing interest as contrary to news reports the mini-budget did not increase federal excise duty on the sector.

"The auto sector, on the other hand, showed a mixed performance despite being the key beneficiary of the change in the government's stance (on car purchase by non-filers of tax returns)," he said.

Pak Suzuki Motor Company (+5%) continued with its winning streak as non-filers would now be able to purchase cars of up to 1,300cc. However, profit-taking was witnessed in Honda Atlas Cars (-4.53%) as the stock had already gained over 42% from its January lows on the change in import policy and anticipation of favourable announcements in the budget.

"The company (Honda) also reported below par results, which further dented sentiments. It announced earnings per share of Rs4.21 for the Oct-Dec 2018 quarter (-58% year-on-year), which was below our estimate of Rs6.2," the analyst said.

"Going forward, we expect the market to take direction from FII flows, which have turned positive in financials recently."



Overall, trading volumes increased to 245.87 million shares compared with Wednesday's tally of 178.99 million. The value of shares traded during the day was Rs9.85 billion.

Shares of 359 companies were traded. At the end of the day, 171 stocks closed higher, 166 declined and 22 remained unchanged.

Pakistan International Bulk Terminal was the volume leader with 32.7 million shares, gaining Rs0.81 to close at Rs12.01. It was followed by The Bank of Punjab with 24.6 million shares, remaining stable at Rs13.18 and Pak Elektron with 18 million shares, losing Rs0.6 to close at Rs27.01.

Foreign institutional investors were net buyers of Rs979.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.