With the release of $500 million by the Asian Infrastructure Investment Bank (AIIB) for Pakistan, the stock market rebounded and made some recovery on Tuesday following a sharp fall a day ago as the muchneeded inflows would provide cushion against the fast dwindling foreign currency reserves of the country.
In a tweet, Finance Minister Ishaq Dar announced that Pakistan had received $500 million from the AIIB in development programme financing.
he news came as a welcome relief for the bruised stock investors, who made modest buying after previous day’s massive selling. Apart from that, easing of political tensions, positive developments in PakistanIMF talks and rupee’s stability helped soothe investors’ nerves, encouraging them to accumulate stocks at attractive valuations.
“Stocks showed a sharp recovery amid thin trade, led by selected blue chips, after the receipt of $500 million from the AIIB and surge in global crude oil prices,” commented Ahsan Mehanti, MD of Arif Habib Corp.
“Easing of political noise and expectations of positive outcome from Pak-IMF talks ahead of the release of a $1.18 billion tranche played the role of catalysts in the bullish close of market,” he said. At close of trading, the benchmark KSE-100 index recorded an increase of 302.25 points, or 0.72%, to settle at 42,373.59.
Topline Securities, in its report, said that Pakistan equities closed positive where the KSE-100 index settled at 42,374 (up 302 points, or 0.72%). “A rebound was witnessed after yesterday’s (Monday’s) bearish trend, which led the market to remain positive throughout the day, during which it touched an intra-day high of 366 points over attractive valuations,” it said.
Major positive contributors were Systems Limited, Hubco, Lucky Cement, HBL and Pakistan State Oil, which added a total of 181 points to the KSE-100 index. Arif Habib Limited, in its report, said that a positive session was witnessed at the PSX. “The index was driven by bulls throughout the day, which showed signs of recovery after yesterday’s sharp decline,” it said.
“Investor sentiment improved as Pakistan received $500 million from the AIIB. There was active investor participation throughout the day, with third-tier stocks recording the most activity.” The KSE-100 index closed at 42,373.59, up by 302.25 points (+0.72% day-onday). Sectors contributing to the performance included commercial banks (+67.7 points), technology and communications (+60.7 points), power generation and distribution (+57.5 points), exploration and production (+34.2 points) and cement (+28.5 points). Volumes decreased from 244.4 million shares to 139.2 million (-43%).
Traded value decreased by 27.5% to $22.6 million against $31.1 million a day ago, Arif Habib report added.JS Research analyst Mubashir Anis Naviwala said that the KSE-100 index posted gains of 302 points and closed at 42,374. Volumes stood at 139 million shares as compared to 244 million a day ago. WorldCall Telecom (0.7%), Unity Foods (5.8%), K-Electric (-0.4%), Bank Alfalah (1%) and Dewan Farooque Motors (0.9%) were the volume leaders.
“Going forward, we recommend investors to adopt a buy-on-dips strategy in the banking and technology sectors,” said the analyst. Overall trading volumes decreased to 139.2 million shares compared with Monday’s tally of 244.4 million. The value of shares traded during the day was Rs5.1 billion. Shares of 339 companies were traded. At the end of the day, 188 stocks closed higher, 123 declined and 28 remained unchanged. WorldCall Telecom was the volume leader with 18.6 million shares, gaining Rs0.01 to close at Rs1.37. It was followed by Unity Foods with 10.1 million shares, gaining Rs0.96 to close at Rs17.56 and K-Electric with 7.5 million shares, losing Rs0.01 to close at Rs2.59. Foreign investors were net buyers of Rs124.28 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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