Market watch: Stocks rally on PM’s relief package

Benchmark KSE-100 index adds 342.57 points to settle at 44,803.58

KARACHI:

Bulls maintained their grip on the Pakistan Stock Exchange on Tuesday, as the announcement of a relief package by Prime Minister Imran Khan instilled a ray of optimism among investors.

The benchmark KSE-100 index stayed in the positive territory throughout the day and staged a handsome rally, gaining 342 points by the end of trading session.

The relief package included a significant reduction in petroleum prices and electricity tariffs coupled with tax concessions for industries till the next budget.

The PM package was hailed by market players, who opted to cherry-pick stocks at attractive valuations.

Moreover, fresh rupee appreciation against the US dollar also kept the trading environment favourable.

Earlier, the trading session began with a sharp incline as the index touched an intra-day high of 45,017 points. However, profit-taking due mainly to geopolitical tensions pulled the index down to around 44,500 points.

Later, the index again began its journey towards north in a gradual manner and eventually closed in the green zone.

At close, the benchmark KSE-100 index recorded an increase of 342.57 points, or 0.77%, to settle at 44,803.58 points.

Topline Securities, in its report, said that Pakistan equities closed on a positive note where the benchmark KSE-100 index settled at 44,803 (up 0.77%).

Investors cheered the relief measures announced by PM Khan on Monday, where reduction in petrol and diesel prices, cut in electricity tariff and tax concessions for industries led the market to touch an intra-day high of 555 points, it said.

Major contributors to the trading session were Pakistan Petroleum Limited, TRG Pakistan and Oil and Gas Development Company – cumulatively adding 210 points, the report added.

On the corporate results front, Unity Foods posted unconsolidated earnings per share of Rs0.9 for the second quarter of 2021-22 as compared to Rs0.8 in the same quarter of previous fiscal year.

The company had posted loss per share of Rs0.02 in the first quarter of FY22.

 “Earnings were lower than expectations,” the report said.

Furthermore, TRG Pakistan posted consolidated loss per share of Rs23.11 for the second quarter of 2021-22.

A report of Arif Habib Limited stated that the market stayed in the bullish zone throughout the day due to the relief package worth 0.54% of gross domestic product (GDP) announced by the prime minister.

The relief package was for the masses to curb the impact of inflation and enhance support for the most vulnerable class of society for the next four months till the announcement of budget, it said.

Moreover, the headline inflation for February 2022 came in at 12.24% year-on-year as compared to 8.70% in February 2021 and 12.96% in January 2022.

The year-on-year uptick in the Consumer Price Index (CPI) was led by food (14.73%), transport (25.04%), housing (8.99%), clothing and footwear (9.67%), miscellaneous (10.07%), restaurants (14.39%), household equipment (13.44%) and health (10.11%).

On a month-on-month basis, the CPI reading increased 1.15%. Though the food and transport index kept the month-on-month inflation high, the housing index declined 1.56% mainly due to the decrease in electricity charges, the report added.

Sectors contributing to the performance included exploration and production (+146 points), technology (+101 points), chemicals (+35 points), power (+21 points) and bank (+16 points).

JS Global analyst Waqar Iqbal said that the market started off on a strong note owing to the relief package announced by the prime minister.

The oil and gas sector dominated the market due to news of circular debt adjustment through hefty dividend payouts.

WorldCall Telecom, TRG Pakistan, Telecard Limited, TPL Properties and TPL Corporation were the volume leaders.

 “Going forward, further clarity about the impact of ongoing developments on the country’s macroeconomic situation will decide the direction of the market,” the analyst said.

Overall trading volumes increased to 309.3 million shares compared with Monday’s tally of 208.1 million. The value of shares traded during the day was Rs10.4 billion.

Shares of 364 companies were traded. At the end of the day, 226 stocks closed higher, 117 declined and 21 remained unchanged.

WorldCall Telecom was the volume leader with 29.9 million shares, gaining Rs0.13 to close at Rs1.96. It was followed by TPL Properties with 19.2 million shares, gaining Rs0.62 to close at Rs31.71 and TRG Pakistan with 18.3 million shares, gaining Rs5.19 to close at Rs74.43.

Foreign institutional investors were net buyers of Rs28.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.