KSE Index rises as fresh investment pours in

The Karachi Stock Exchange (KSE) witnessed fresh investment on Monday, amid high turnover as the market welcomed textile package, record federal PSDP of Rs700 billion and incentives to the agriculture sector.
Ahsan Mehanti at Arif Habib Commodities said Cement, textile and the fertiliser scrips led the market sentiment.
“Banking stocks battered on levy of super tax and 35 percent uniform tax on all income sources. Expectations for higher dividend payouts in the listed corporate sector amid 10 percent levy on undistributed reserves played a catalyst role in bullish activity at KSE ignoring higher tax on dividends, super tax and CGT rate revision”.
The KSE-100 shares Index gained 138.62 points, or 0.41 percent, to close at 34,151.11 points. The KSE-30 shares Index remained flat at 21,563.03 points. As many as 387 scrips were active, of which 228 advanced, 139 declined and 20 remained unchanged. The ready market volumes stood at 449.977 million shares as compared to 333.656 million shares in the last trading session.
Mohammad Rizwan at Topline Securities said the KSE-100 index witnessed a volatile session post-budget announcement with above average volumes. “The index fell by 2.64 percent at the opening, as banking stocks took a beating. However, rally in cement and textile sectors helped the index close 0.4 percent up,” Rizwan said. “Traded volumes stood at 17-week high, while the value of the traded shares stood at $219 million not seen in 14 months.” Banking stocks declined as the budget proposed 35 percent tax on all sources of income of banks, which will have a negative impact on the sector’s earning. MCB declined 3.77 percent, NBP declined 2.82 percent, UBL was down 3.97 percent and HBL closed 4.25 percent down.
Cement stocks rallied and most of the scrips, including Lucky Cement, DG Khan Cement, Maple Leaf Cement and Cherat Cement hit the upper lock of five percent, after higher development expenditure allocation and tax on cement imports.
Announcement of the textile package in budget and reduction in the Export Refinance Rate brought renewed interest in the sector. Nishat Mills gained 2.85 percent and Kohinoor Textile surged 5pc.
Umair Hasan at JS Global Capital said the market witnessed sharp volatility, as the day’s trade began with a dip of 875 points dominated primarily by selling in the banking sector. “After witnessing a sharp downside, institutional buying was witnessed across all under-valued sectors. The main beneficiary was the cement sector. Lower discount rates and a healthy PSDP fund along with housing credits and tax exemptions all proved to be positive for the cement sector”. Highest volumes were witnessed in Fauji Cement with a turnover of 28.897 million shares. The scrip gained Rs1.72 paisas to close at Rs 36.21; followed by KEL with a turnover of 25.885 million shares. It shed 9 paisas to end at Rs8.02. Dewan Cement was the third with a turnover of 24.813m shares. It gained 95 paisas to finish at Rs9.45 per share.