The stock market began the new year on a positive note on Friday and surpassed the 44,000-point barrier, continuing the momentum from the last few days of December.
The benchmark KSE-100 index, while maintaining its upward march, made a strong advance as investors cheered encouraging inflation data for December. The Consumer Price Index (CPI) was calculated at 8% for December 2020 compared to 8.3% in November 2020, according to the Pakistan Bureau of Statistics.
The uptrend was further fuelled by a rally in regional and global markets coupled with progress on settling the circular debt issue.
A meeting was held between government officials and independent power producers (IPPs) on Friday where the former offered a package to the IPPs for clearing circular debt worth Rs450 billion.
Moreover, reports of growing exports lent further support to the bullish momentum. According to a tweet from Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood, exports grew 18.3% to $2.357 billion in December 2020 as compared to $1.993 billion in December 2019.
Construction and steel sectors played the role of a catalyst in the positive close as they welcomed the decision taken by Prime Minister Imran Khan to extend the deadline for the fixed tax regime and for the disclosure of source of income by investors along with further incentives for the construction sector.
The benchmark index spiked at the beginning of trading and kept rising till the end of first session. However, selling pressure in the second session wiped off most of the gains.
Investors’ interest remained mixed during the second session as they cheered the low inflation reading while at the same time there was uncertainty about the economic performance in 2021 amid rising coronavirus cases.
At close, the benchmark KSE-100 index recorded an increase of 679.42 points, or 1.55%, to settle at 44,434.80 points.
Speaking to The Express Tribune, Tangent Capital Advisers CEO Muzammil Aslam said, “Government officials held a meeting with the independent power producers at the Ministry of Finance and they agreed to make payments in three installments in 2021.” The much-needed progress on the circular debt issue was welcomed by the investors, he added.
Commenting on the market’s advance, Alpha Beta Core CEO Khurram Schehzad said that KSE-100’s surge came on the back of escalation in regional and international equity markets. He added that the increase in KSE-100 index was way lower compared to several regional markets, which skyrocketed in the first trading session of the year.
“In addition, the extension in the fixed tax regime for the construction sector, announced by Prime Minister Imran Khan on Thursday, gave a boost to stocks of cement and steel sectors,” he said. “This, in turn, propelled the bourse.”
Overall, trading volumes rose to 642.6 million shares compared with Thursday’s tally of 578.3 million. The value of shares traded during the day was Rs27.3 billion.
Shares of 406 companies were traded. At the end of the day, 214 stocks closed higher, 178 declined and 14 remained unchanged.
Power Cement was the volume leader with 35.8 million shares, gaining Rs0.32 to close at Rs10.20. It was followed by Hascol Petroleum with 35.5 million shares, gaining Rs0.4 to close at Rs15.09 and Pakistan Refinery with 33.6 million shares, losing Rs0.36 to close at Rs23.43
Foreign institutional investors were net buyers of Rs76.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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