Market watch: KSE-100 rebounds as SBP eases rules for exporters

Benchmark index rises 401.40 points to settle at 37,166.96

KARACHI: A day after a bearish session was witnessed at the bourse, the KSE-100 index rebounded and posted a gain of 401 points on Wednesday as investors took positive cue from the relaxation in rules by the State Bank to facilitate importers and exporters.

The traded value of stocks soared to 2019 high and the market also hit a seven-month high.

On Tuesday, State Bank of Pakistan Governor Dr Reza Baqir announced that the central bank was lifting the ban on advance payment of up to $10,000 per invoice for the import of goods and services aimed at facilitating small and medium-sized importers (cum exporters).

It also enhanced the financing limit for exporters under the subsidised loan schemes including the Export Finance Scheme (EFS) and Long Term Finance Facility (LTFF). Both initiatives were targeted at further relaxing doing business terms in Pakistan and boosting exports.

In the morning, trading began on a negative note at the bourse with the benchmark KSE-100 index falling below the 36,500-point mark. The sombre mood turned positive as the day progressed and investor sentiment improved, triggering a buying spree, which wiped out all the losses and helped the market close with handsome gains.

At close, the benchmark KSE 100-share Index recorded an increase of 401.40 points, or 1.09%, to settle at 37,166.96.

Arif Habib Limited, in its report, stated that just when the market was expected to lose steam after trading in the overbought zone for the past several sessions, it bounced back.

"The benchmark index initially dropped 285 points but regained its position and went up 524 points," it said. "Activity picked up pace as the market approached the day's close, ending the session up 340 points (unadjusted)."

Buying activity was largely noted in textile, banking and steel sectors that pushed the index up whereas the cement sector faced selling pressure throughout the day.

Among chemical stocks, Lotte Chemical continued to experience selling pressure whereas Engro Polymer made gains.

The cement sector led the volumes table with trading in 32.1 million shares, followed by the technology sector (31.9 million) and engineering sector (25.6 million).

Among individual stocks, Unity Foods again led the volumes with 16.4 million shares changing hands, followed by WorldCall Telecom (12.9 million) and TRG Pakistan (11.1 million), the report added.

Topline Research stated in its report that after depicting a flattish trend in the previous session, the KSE-100 index returned to its upward trajectory and gained 1.09% or 401 points to close at 37,167.

"The last time the market touched the 37,000 level was in April 2019 - seven months ago," it added. "Furthermore, the traded value of Rs10.7 billion was the highest for the year thus far."

According to rumours in the market, a pension fund had made investment in mutual funds, which led the rally.

Nishat Mills, Gul Ahmed Textile Mills and Feroze1888 Mills closed positive in the range of 3-5% in the wake of the recent export-based incentive package announced by the State Bank, the report added.

Overall, trading volumes decreased to 275.4 million shares compared with Tuesday's tally of 292.1 million. The value of shares traded during the day was Rs10.8 billion.

Shares of 379 companies were traded. At the end of the day, 230 stocks closed higher, 130 declined and 19 remained unchanged.

Unity Foods was the volume leader with 16.5 million shares, gaining Rs0.48 to close at Rs11.66. It was followed by WorldCall Telecom with 12.9 million shares, losing Rs0.03 to close at Rs1.63 and TRG Pakistan with 11.1 million shares, gaining Rs0.58 to close at Rs20.04.

Foreign institutional investors were net buyers of Rs280.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.