Stocks staged a strong recovery on Tuesday after suffering a string of losses, scoring more than one-and-a-half percent as investors cheered the new government’s supplementary budgetary measures, aimed to raise revenues in excess of Rs180 billion to help finance the fiscal deficit to some extent, dealers said.
Faisal Shaji, Strategist at Standard Capital said the market responded positively to Finance Minister Asad Umar’s supplementary budget speech.
“Announcements seem a relief for local assemblers, construction materials, and food sectors, wherein market made an intraday high of 715 points”, Shaji said.
Now, he said, the market was anxiously waiting to see the outcome of Prime Minister Imran Khan’s visits to Saudi Arabia and United Arab Emirates (UAE), where he would try to negotiate some funding so that Pakistan could avert a balance of payment crisis.
“The market during the initial hours was bit depressed but following the mini-budget filters it rose sharply and recorded appreciable gains,” he added.
Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index rose 1.77 percent or 717.60 points to close at 41,238.07 points, while its KSE-30 shares index swelled 1.76 percent or 349.24 points to end at 20,143.02 points.
Of 382 active scrips, 287 moved up, 68 retreated, and 27 remained unchanged. The ready market volumes stood at 166.519 billion shares as compared with the turnover of 145.200 billion shares in the previous session.
Analyst Ahsan Mehanti from Arif Habib Corporations said the stocks closed record higher after government unveiled amended finance bill 2018, supporting some industries and auto sector.
The Economic Coordination Committee (ECC) approvals on surge in gas prices impacting power, fertilisers, and industrial sectors, and investors’ expectations for raise in super tax levies, corporate tax levies, invited midsession pressure, Mehanti said.
“Upbeat fiscal deficit target at 5.1pc for FY19, proposed finance bill amendments supporting auto sector, continuation of CPEC (China-Pakistan Economic Corridor) projects, and proposal for the reversal of petroleum development levy cheered investor sentiment,” he added.
An analyst from WE Financial Services Ltd said the bull-run was observed throughout the market as the investors’ confidence was restored on the back of amendments in finance bill presented by the finance minister.
The indexed heavy cement sector came in limelight and led the market in green zone after the announcement that an amount of Rs4.5 billion would be released immediately for the construction of pending housing schemes for underprivileged class, while another 10,000 houses would also be constructed shortly after, the analyst said.
“In addition to that, the CPEC project would be given full attention and dams would be built in 5-6 years. On the other hand, auto sector also hit the spotlight after the amended bill suggested the non-filers were now able to purchase the cars,” the WE analyst said.
The highest gainers were Indus Colgate Palmolive that moved up Rs67.10 to close at Rs2425.00/share, and Island Textile that rose Rs66.87 to finish at Rs1405.62/share.
Companies that booked highest losses were EFU Life Assurance, which went down Rs11.87 to close at Rs225.64/share, and Sitara Chemical, which lost Rs9.61 to finish at Rs369.83/share.
Lotte Chemical recorded the highest volumes with a turnover of 13.241 million shares. The scrip gained Rs0.49 to close at Rs14.70/share.
It was followed by Unity Foods Limited with a turnover of 10.440 million shares, whereas the scrip gained Rs1.72 to close at Rs36.24/share.
The lowest volumes were witnessed in Indus Motor Company Limited, recording a turnover of Rs46,460 shares, the scrip lost Rs8.20 to end at Rs1492.42/share.