Stocks rallied on Friday to bust a multi-day riot as bargain hunters made the most of attractive valuations, while sentiments also got a boost from the arrival of financial assistance from Saudi Arabia and Asian Development Bank’s (ADB) assurance to loan Pakistan, dealers said.
Analyst Ahsan Mehanti from Arif Habib Corporations said stocks showed strong recovery led by scrips across-the-board as investors weighed $7.5 billion ADB loan approval for budgetary support and sharp recovery in global crude prices.
“Renewed institutional interest on likely rationalisation of the PSX taxes and government measures for raising investor confidence guided the market to a green close,” Mehanti said adding trade was higher steered by oversold banking, cement, auto stocks.
Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 1.51 percent or 574.03 points to close at 38,585.66 points level. KSE-30 shares index followed suit with a high of 1.75 percent or 315.86 points to end at 18,405.91 points level.
Of 336 active scrips, 245 moved up, 67 retreated, and 24 remained unchanged. The ready market volumes stood at 98.522 million shares, as compared with the turnover of 84.248 million shares in the previous session.
Adil Ghaffar, CEO of First Equity Modaraba, said rise in stock market could be attributed to the excellent political move of the ruling party to accept leader of the opposition or his nominee as chairman public accounts committee. “It should not be construed as U-turn rather a very well played ball to unveil opposition,” Ghaffar said.
As expected, he said, Pakistan received second tranche of $1 billion from Saudi Arabia. “This will surely give breathing a space to foreign exchange reserves-starved central bank and will prove a relief to finance minister,” the analyst said.
Ghaffar added that further hike in interest rates could not be ruled out and one should expect another at least 100 basis point increase in January 2019.
The stock market opened in the green zone and stayed there because of a host of positive developments on the financial horizon. ADB said it would provide nearly $7.5 billion dollars to Pakistan to improve its different sectors where most of i.e., energy, financial and water. The bull-run further strengthened following the confirmation from the State Bank that Pakistan has received $1 billion as the second tranche from the Saudi Arabia to help boost foreign exchange reserves.
Since the arrival of the first installment from Saudi Arabia, reserves have depleted by the same amount because of external debt and interest payments.
According to an analyst there was no big development in any sector, the buying euphoria was due to release of funding from the brotherly country, while companies whose shares lost more than 40 to 50 percent during the recent downward, have now become enticing for domestic investors.
The highest gainers were Mari Petroleum, up Rs29.46 to close at Rs1354.71/share, and Siemens Pakistan, up Rs20.18 to finish at Rs893.75/share.
Companies that booked highest losses were Pakistan Tobacco, down Rs13.42 to close at Rs2330.50/share, and Premium Textile, down Rs12.06 to close at Rs229.44/share. Bank of Punjab recorded the highest volumes with a turnover of 11.060 billion shares. The scrip gained Rs0.16 to close at Rs12.74/share.
The lowest volumes were witnessed in Johnson & Phillips Pakistan Limited, recording a turnover of Rs11,500 shares, and losing Rs3.18 to end at Rs60.72/share.