Hopes of bonus shares fuel rally at PSX

Pakistan Stock Exchange (PSX) on Monday enjoyed a bullish trend as investors snapped up attractive shares in anticipation of big bonus announcements by companies to avoid the imposition of tax on their reserves in the upcoming budget for FY24.

The market opened in the green and continued to trade in the positive territory with buying momentum seen across many sectors including technology, fertiliser, exploration and production (E&P) and cement. Overall trading volumes surged more than 100% to nearly 350 million shares.

“Stocks closed bullish amid reports of $2 billion deposit by Saudi Arabia to help Pakistan avoid default and revive the IMF programme,” said Arif Habib Commodities CEO Ahsan Mehanti.

At close, the benchmark KSE-100 index registered an increase of 375.52 points, or 0.92%, and settled at 41,340.06.

Topline Securities reported that Pakistan equities had a bullish day in anticipation of announcement of big bonuses by listed companies to avoid tax as the street was expecting the implementation of a tax on reserves in the upcoming budget.

“The expectation assisted the market in staying in the green throughout the day and it settled at 41,340, up 376 points,” it said. “Buying momentum was witnessed across the board as investors opted to build positions in stocks of technology, fertiliser, E&P and cement sectors,” Topline added.

Arif Habib Limited (AHL), in its report, said that bulls triumphed at the PSX at the beginning of a new week.

“The market opened in the green and continued to trade fervently over rumours of imposition of a tax on corporate reserves.”

Published in The Express Tribune, May 30^th, 2023.

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