Stocks jump near 2pc as PM’s promises prove a springboard

Stocks on Monday jumped after Prime Minister Imran Khan’s promises of tax breaks and other measures to boost foreign as well as domestic investment in the capital markets proved to be a springboard for the otherwise rather cautious investors, dealers said.

Topline Securities in its market review said investors were mainly motivated by PM’s meeting with a Pakistan Stock Exchange (PSX) delegation led by Chairman Sulaiman Mehdi on Sunday.

“During the meeting several strategies were discussed to try and rejuvenate the PSX, including removal of advance tax of .02 percent on purchase and sale of shares and allowing carry forward of capital losses up to 3 years among several other decisions,” the brokerage said.

The PSX’s benchmark KSE-100 shares index gained 1.91 percent or 737.58 points to close at 39,299.63 points. The KSE-30 shares index rose 2.27 percent or by 417.77 points to end at 18,800.19 points level.

Of 356 active scrips, 242 moved up, 93 retreated, and 21 remained unchanged. The ready market volumes stood at 154.173 billion shares, as compared with the turnover of 128.530 billion shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks showed strong recovery across the board amid PM’s affirmation on fast-track enactment of the PSX proposals on taxes, regulations and China-Pakistan Economic Corridor (CPEC) debt listings. “Trade remained higher led by oversold banking, cement, auto stocks. Renewed institutional interest on likely rationalisation of PSX taxes and government measures for raising investor confidence played a catalytic role in bullish close,” Mehanti added.

Hamad Aslam, director research at Elixir Securities, said despite commitments on CGT (Taxes on Capital Gains) on stocks to those applicable on Real Estate and rationalising the unfair Presumptive Tax on Brokers to 0.01 percent from 0.02 percent, the larger concerns on economy remain undeterred. “The latest set of relaxations however did serve as a much-needed breather for the market,” Aslam explained. The stock market opened on a positive note and remained in the plus column throughout the session. The investors greeted the assurances of the Prime Minister Imran Khan and his economic team in a meeting with the senior stock brokers. Cement companies witnessed share price increase in the range of Rs0.17 to Rs10.41 while steel sector heralded rise in the range of Rs0.10 to Rs2.07. Oil companies also came under the radar of buyers on a rising international crude oil prices, following OPEC’s decision to cut supplies by 1.2 million barrels per day against the market expectations of 1 million barrels per day.

Oil companies recorded rise in the range of Rs6 to Rs44 per share. The decision to help improve sales of the refineries would also help the units to refine other petroleum products which have been slower because of continuous pile of the furnace oil stocks.

The highest gainers were Phillip Morris Pakistan, up Rs60.55 to close at Rs3500.00/share, and Wyeth Pakistan Limited, up Rs47.59 to finish at Rs1048.59 / share. Companies that booked highest losses were Rafhan Maize, down Rs339.99 to close at Rs6760.01share, and Pakistan Tobacco, down Rs25.00 to close at Rs2349.00/share. K-Electric Limited recorded the highest volumes with a turnover of 34.681 million shares. The scrip gained Rs0.45 to close at Rs5.98/share. The lowest volumes were witnessed in Atlas Honda Limited, recording a turnover of Rs27,800 shares, and losing Rs9 to end at Rs424.67/share.