Index gains more than 1pc as anti-terror bills get go-ahead

The capital market on Thursday climbed more than one percent as financial institutions went on a buying spree following the passing of the anti-terrorism bills by both houses, which pushed the index above 39,000 points level after almost four months, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed bullish in the earnings season rally led by scrips across the board, as investor weighed positive outcome of Privatisation Commission’s divestment proposal for OGDC (Oil and Gas Development Company) up to 10 percent amid higher global crude oil prices and robust global equities.”

Surge in local auto prices, reports of stronger data on cement, urea sales in July 2020 and government resolve to privatise state owned entities played a catalytic role in the bullish close, Mehanti added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.09 percent or 422.17 points to close at 39,258.44 points level. KSE-30 shares index followed suit with a high of 1.02 percent or 172.32 points to end at 17,070.02 points level.

Of 397 active scrips, 239 went up, 137 retreated, and 21 remained unchanged. The ready market volumes stood at 368.700 million shares, as compared with the turnover of 508.260 million shares in the previous session. Muhammad Saeed Khalid, head of research at Shajar Capital said, “Robust activity in the market was mainly induced by the decision on the duo-FATF (Financial Action Task Force) related bills ie Anti Terrorism Act and United Nations Security Act in the National Assembly.”

He further said, “We have noticed significant rise in OMC (oil marketing companies) scrips along with refinery scrips mainly on the decision made by the Economic Coordination Committee regarding rescheduling of pricing on fortnightly basis.”

On March 5, 2020 the index was around 39,000 points, but in the three months following the rise of COVID-19 cases in Pakistan, financial institutions started backing away from new commitments in view of subdued business cycle and falling exports.

Hope however has renewed now due to lower interest rates, declining number of new COVID-19 cases, and easing lockdown that has helped revive confidence.

OGDC, down 0.68 percent, and PPL, down 1.45 percent, closed in red after privatisation board approved divestment target to 10 percent. Cements, banks and pharmaceuticals led the index gains, cumulatively adding 182 points, Balani added.

Tahir Abbas, director research at Arif Habib said when the government slashed interest rate, financial institutions, mutual funds, fixed income certificates, and bond markets became less lucrative, forcing institutions to tap every possible opportunity in the equity market, Abbas added.

Zia Shafi, senior investment advisor at Intermarket Securities said the index after continuous surge this week might see some adjustments after Eid, which would be just a technical correction, following the dip. He suggested picking blue chips and investment stocks.

The top gainers were Indus Motor Company, gaining Rs76.09 to close at Rs1,422.37/share, and Island Textile, up Rs69.50 to finish at Rs109.00/share, while Sapphire Textile, down Rs49.01 to close at Rs786.00/share, and Nestle Pakistan, losing Rs33.33 to close at Rs6,466.67/share, were the main losers.

Pakistan International Bulk posted the highest volumes with 43.308 million shares, but gained Re0.62 to end at Rs11.25/share. Unity Foods Limited turnover was the lowest with 9.308 million shares, whereas its scrip lost Re0.1 to end at Rs12.45/share.