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April 20, 2019

Stocks gain as govt installs Hafeez Shaikh at Finance Ministry

Business

April 20, 2019

Equities gained 1.31 percent on Friday, making appreciable gains amid hopes that the new appointment at the Finance Ministry will help change the fortunes and adopt measures to revive the sagging economy, dealers said.

Saad Hashemy, chief economist at Topline Securities, said couple of developments helped improve the stock market’s sentiments. “Fast action from the government to appoint Dr Hafeez Shaikh rekindled hope that economic policy would be in a pro-IMF and more consistent direction.”

Moreover, the clarity on part of the State Bank of Pakistan that funds of government parked at private banks would not be moved to the central bank without the banks’ consent, rejuvenated sentiments in the banking sector, he said, adding, “Few financial results from the corporate sector also enticed investors.”

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.31 percent or 480.61 points to close at 37,292.47 points level. KSE-30 shares index followed suit with a high of 1.61 percent or 280.84 points to end at 17,739.37 points level.

Of 334 active scrips, 241 moved up, 78 retreated, and 15 remained unchanged. The ready market volumes stood at 177.355 billion shares, as compared with the turnover of 216.247 billion shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed bullish amid upbeat data on current account deficit narrowing down by 29 percent for July-March 2019 to $9.58 billion.”

Midsession pressure remained on concerns over dismal data on foreign direct investments falling by 51 percent to $1.273 billiom for July-March 2019 and falling foreign reserves.

“Speculation on positive outcome of new finance minister’s appointment ahead of discussions over IMF bailout package, and rupee stability played a catalytic role in the bullish close in the late session rally at PSX,” he added.

Salman Ahmad, director institutional sales at Aba Ali Habib said after several weekends, it was the first good Friday, when the market closed with appreciable gains and on higher volumes.

The share market opened on a jittery note, but buying in patches was witnessed in the choice scrips; however, confirmation that the government would appoint Dr Hafeez Shaikh as the advisor to Prime Minister on Finance brought hope that policies would be pro-investment.

The index at one stage, Ahmad said went as high as 900 points, but profit taking set in when a statement flashed on electronic media that Dr Hafeez Shaikh has tabled some conditions to become the advisor on finance. Despite that, it closed on a healthy note, with expectations that the decline would be stemmed with a growth-oriented announcement by the new advisor, he added.

The highest gainers were Nestle Pakistan, up Rs360.50 to close at Rs7,900.00/share, and Rafhan Maize, up Rs196.00 to finish at Rs7,195.00/share.

Companies that booked highest losses were Hinopak Motors, down Rs20.58 to close at Rs391.13/share, and Mari Petroleum, down Rs14.62 to close at Rs1,178.96/share.

Bank of Punjab recorded the highest volumes with a turnover of 28.675 billion shares. The scrip gained Rs0.99 to close at Rs12.61/share.

The lowest volumes were witnessed in K-Electric Limited, recording a turnover of 13.551 billion shares, whereas the scrip lost Rs0.03 to end at Rs5.03/share.

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