Market watch: Approval of mini-budget propels stock market
Shares of 373 companies were traded. At the end of the day, 202 stocks closed higher. PHOTO: REUTERS
Bulls held sway at the Pakistan Stock Exchange on Thursday and the KSE-100 index advanced 156 points aided by approval of mini-budget by the federal cabinet which signaled revival of International Monetary Fund (IMF) programme.
After the State Bank of Pakistan autonomy bill received a go-ahead from the government, the mini-budget was the last hurdle remaining in the way of resumption of $6 billion IMF bailout programme and receipt of $1 billion tranche from the global lender. Investor sentiments strengthened after the supplementary finance bill received the nod of the government and participants made fresh buying.
The approval also brought long standing uncertainty at the bourse to an end and lifted the market upward. Moreover, market players took cues form sharp recovery in rupee against the US dollar and cherry picked stocks. Aiding the uptrend, the introduction of Shariah compliant liquidity facilities by the State Bank of Pakistan for the Islamic banking institutions triggered a rally in the banking sector and major names closed with gains.
The KSE-100 index began the session with a jump and remained in the green zone throughout the day. The market breached 44,500 point mark multiple times however lack of encouraging developments dragged it downward. Although the market remained largely range-bound but still it managed to end the day on a positive note.
At close, the benchmark KSE-100 index recorded an increase of 156.09 points, or 0.35%, to settle at 44,416.2.
A report from Arif Habib Limited stated that the index stayed in the green zone ahead of mini-budget approval by the National Assembly.
Cement sector remained in the limelight as cement stocks rallied in the first trading hour due to reduction in international coal prices.
In the banking sector, Meezan Bank stayed in the limelight as SBP for the first time has introduced Shariah compliant liquidity facilities for Islamic banking institutions to enable them to offer better returns and rates to their customers on deposits and loans.
Moreover, activity continued to remain sideways as market witnessed hefty volumes in the third tier stocks, the report said.
JS Global analyst Muhammad Mubashir said bulls made a comeback on Wednesday as the market made an intraday high of 44,590 points.
The index eventually closed at the level of 44,416, gaining 156 points day-on-day.
Traded volumes stood at 243 million shares where K-Electric (0.9%), Treet Corp (3.0%), TRG Pakistan (3.2%), Cnergyico PK (-3.3%) and Pakistan Refinery (2.1%) cumulatively contributed 33% to the total volumes.
“Going forward, we recommend investors to avail any downside as an opportunity to buy in banking, exploration and production and cement sectors,” the analyst said.
Overall trading volumes contracted to 243.1 million shares compared with Wednesday’s tally of 271.1 million. The value of shares traded during the day was Rs10.3 billion.
Shares of 373 companies were traded. At the end of the day, 202 stocks closed higher, 149 declined and 22 remained unchanged.
K-Electric was the volume leader with 22.9 million shares, gaining Rs0.03 to close at Rs3.45. It was followed by Treet Corp with 19.1 million shares, gaining Rs1.22 to close at Rs42.33 and TRG Pakistan with 17.7 million shares, gaining Rs3.88 to close at Rs125.01.
Foreign institutional investors were net buyers of Rs739.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.