KARACHI: The Pakistan Stock Exchange staged a smart rally on Thursday as investors anticipated an extension in Chief of Army Staff General Qamar Javed Bajwa’s tenure following a controversy over the issue.
The rally helped lift the market to an eight-month high, according to Topline Securities.
At the end of trading, the Supreme Court approved a conditional extension in the army chief’s tenure for six months.
Earlier, trading kicked off on a positive note and the uptrend continued for the rest of the day. In the early hours, however, investor sentiment weakened slightly as political uncertainty took its toll.
As the day progressed, clarity started to emerge on the matter, sparking a rally, which helped the market close above the 38,700-point mark.
At close, the benchmark KSE 100-share Index recorded an increase of 583.55 points, or 1.53%, to settle at 38,706.27.
“There was nothing else but of course the expected short verdict in the army chief case helped push the market up,” Arif Habib Limited Head of Equity Sales Saad bin Ahmed said while talking to The Express Tribune. “Media reports suggested that the army chief was expected to be given a three-month extension by the court.”
He added that individuals and institutional investors were resorting to hefty buying. “The market is expected to cross the 40,000-point mark soon,” he said. “Investors are targeting 42,000 points now.”
He expected the level to be tested sometime in December, adding that banks and mutual funds were buying stocks as they had liquidated their positions earlier.
Arif Habib Limited, in its report, stated that expectation of resolution of the controversy regarding the chief of army staff’s extension in service helped the index recover as investors – largely individuals and corporates – had been buying at dips since the past week.
“The market opened on a positive note and reached +724 points,” it added. “Activity was seen across the board with major activity in cement and bank stocks.”
Profit-booking was also witnessed, which brought the index down to +584 points by the close.
The auto sector had generally been rallying on the back of Auto Industry Development Policy where shares were seen hitting their upper circuits in Thursday’s session.
The cement sector led the volumes with trading in 48.8 million shares, followed by banks (40 million) and engineering companies (36.5 million).
Among individual stocks, Unity Foods again topped the chart with 20.4 million shares changing hands, followed by Pak Elektron (19.7 million) and TRG Pakistan (15.8 million), the report added.
Overall, trading volumes increased to 348.5 million shares compared with Wednesday’s tally of 228.4 million. The value of shares traded during the day was Rs12.1 billion.
Shares of 396 companies were traded. At the end of the day, 316 stocks closed higher, 64 declined and 16 remained unchanged.
Unity Foods was the volume leader with 20.4 million shares, gaining Rs0.43 to close at Rs13.42. It was followed by Pak Elektron with 19.8 million shares, gaining Rs1.25 to close at Rs26.65 and TRG Pakistan with 15.8 million shares, gaining Rs0.38 to close at Rs23.26.
Foreign institutional investors were net sellers of Rs130 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.