Stocks climb up 1.43pc as FM says balance of payment crisis over

Stocks climbed up by 1.43 percent on Wednesday following Finance Minister Asad Umar’s statement that Pakistan’s balance of payment crisis was over and efforts will be undertaken to boost exports, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks turned bullish on finance minister’s affirmation that the imminent balance of payment crises has been averted on Chinese commitments and $6 billion Saudi Arabia bailout package.”

Trade remained high amid investor interest in scrips across the board on likely implementation of reforms to avert fiscal and external imbalances supporting credit profiles. Moody’s report on stable outlook for Pakistan and investor speculations amid IMF team visit for bailout talks to deal with the economic crises played a catalytic role in the bullish close, he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.43 percent or 585.45 points to close at 41,543.98 points level. KSE-30 shares index followed suit with a gain of 1.57 percent or 309.15 points to end at 20,039.51 points level.

As many as 375 scrips were active in today’s session, of those 284 moved up, 75 retreated, and 16 remained unchanged. The ready market volumes stood at 276.929 billion shares, as compared with the turnover of 230.360 billion shares in the previous session.

Shumaila Badar, head of research at Ismail Iqbal Securities, said, “The market rallied upon assurance by the finance minister related to Pakistan's external position.”

Cements also contributed to the index gains as news that the government does not hold them responsible for recent cement price hike led to a rally in the sector. PSO was flat despite news that banks would provide loans to ease its circular debt situation.

“We expect some profit booking in coming sessions,” Shumaila added. Foreign Minister Shah Mahmood Qureshi and Finance Minister Asad Umar’s statements given late in the evening on Tuesday that China’s visit was successful kept investors in high spirits throughout Wednesday’s session.

Auto sector witnessed a buying spree on reports that a petition was filed against the government decision barring non-filers from buying vehicles. Pak Suzuki went up by Rs10.95/share, Honda Motors Rs2.95/share, while Indus Motors was up Rs0.85/share.

Banking shares were in the limelight once again, because at the MCB Bank conference call attended by almost all leading brokerage houses, the bank officials said the central bank would likely increase interest rate by 100 basis points in its upcoming monetary policy meeting. Bank shares recorded increase in the range of four paisa to Rs4.50, while MCB Bank shares jumped up by Rs2.42.

The highest gainers were Wyeth Pakistan Limited, up Rs60.00 to close at Rs1,260.00/share, and Lucky Cement, up Rs22.85 to finish at Rs494.37/share. Companies that booked highest losses were Pakistan Tobacco, down Rs105.31 to close at Rs2,194.19/share, and Khyber Tobacco, down Rs30.00 to close at Rs570.00/share.

Bank of Punjab recorded the highest volumes with a turnover of 35.034 million shares. The scrip gained Rs0.71 to close at Rs13.35/share. The lowest volumes were witnessed in Atlas Honda Limited, recording a turnover of 1,600 shares. The scrip lost Rs0.70 to end at Rs446.00/share.