Stocks stage strong comeback as investors cheer PM promises

KARACHI: Stocks gained more than two percent on Monday as bulls roared back to rescue sagging shares after the country’s premier promised them of nourishing feeds during a meeting over the weekend, dealers said.   

“Equities managed a notable comeback after days of lull as the market cheered and pinned hopes on a support package for equities by the government on request of brokers and investment community,” Elixir Securities said in a report.

Prime Minister Shahid Khaqan Abbasi constituted a committee, headed by Governor Sindh Muhammad Zubair, to review proposals of tax rationalisation and Rs20 billion worth of market support fund in a long-awaited meeting with stock brokers on Saturday. 

The KSE 100-share index gained 2.37 percent or 944.61 points to close at 40,791.39 points. KSE 30-share index rose 2.5 percent or 505.37 points to end at 20,715.11 points. As many as 388 shares were active; of which 296 increased, 79 decreased and 13 remained unchanged.

The ready market volumes stood at 124.799 million shares as compared to the turnover of 153.825 million shares a day earlier. Chief Commercial Officer Khurram Schehzad at JS Global Capital said Prime Minister Abbasi assured the investors of addressing their issues. “He was quite receptive to the suggestions of the meeting participants.”

Brokers requested the prime minister to revive the capital market fund formed by National Investment Trust in 2008 to support share market, phase out tax on bonus shares and reduce capital gains tax and tax on brokers. 

“Abbasi gave full assurance to the meeting's participants to revisit the taxes on capital market,” Schehzad added. Dealers said KSE-100 index ended the day with a healthy 2.4 percent gain. However, turnover did not match the excitement as only $57 million worth of shares traded on KSE All shares against the average $59 million last week, indicating a cautious optimism by the players, they added.

Selective interest was witnessed despite reports of select foreign buying with recent laggard index names across cement, oil and bank sectors leading the contributors’ table while most volumes were in penny names on possible retail churning.

Analysts said positive news flow over support fund will have to flow through in days ahead for continuation of momentum to push market past resistances on the upside, given noise on political front and economic concerns.

Companies, reflecting highest gains, included Wyeth Pakistan up Rs60.02 to close at Rs1,705.02/share and Khyber Tobacco that rose Rs56.16 to end at Rs1,179.23/share. Companies, with most losses, included JDW Sugar down Rs15 to end at Rs370/share and Faisal Spinning that fell Rs14.23 to close at Rs270.67/share.

Highest volume was witnessed in Chakwal Spinning with a turnover of 10.97 million shares. Its share value shed 94 paisas to close at Rs5.3/share. Aisha Steel Mill was the second with a turnover of 6.65 million shares. Its stock price gained 98 paisas to end at Rs17.16/share. TRG Pakistan was the third with a turnover of 5.55 million shares. Its share value was up Rs1.62 to finish at Rs34.12/share.