PSX cheers Karachi package betting on a cyclical boom

Stocks on Monday ended higher as the unveiling of an infrastructure development package worth Rs1.1 trillion for the country’s economic powerhouse, gave cyclical stocks a solid upward thrust, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark, KSE-100 shares index, gained 0.65 percent or 272.75 points to close at 42,295.75 points, while volumes were almost unchanged at 748.896 million shares, compared to 758.076 million in the previous session.

KSE-30 shares index followed suit with a high of 0.45 percent or 80.09 points to end at 17,998.72 points level. Brokerage Topline Securities in a research note said, “The announcement of Rs1.1 trillion package for the development of the country’s financial capital by Prime Minister Imran Khan led the market to kick-off on a positive note”.

Furthermore, investor interest was centered in cements, steels, chemicals, fertilisers, and refineries, while energy sector closed 0.83 percent down on weak international crude, the report said.

A scripwise breakdown shows that of 434 active scrips, 273 were up, 134 down, and 27 remained unchanged. Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks showed strong recovery with most of the activity seen in cement, banking, and industrials on Prime Minister’s commitments for Rs1.1 trillion uplift package for Karachi”.

However, oil stocks were clobbered by the falling global crude oil prices, he added. “Record financial results in banking sector, subdued CPI inflation data for August and reports of surging fertiliser and petroleum products sales contributed to a bullish close, Mehanti added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said "We had predicted the fundamentals were strong and the market would reassess its value on key developments, like the uplift package for Karachi, which it did.

The announcement also boosted sentiments in the steel and cement sectors”. “Both sectors performed well as on the announcement of package and the data released by Planning Division in which it said that in almost two months the government had released around Rs120 billion for the public sector development.”

Furthermore technology shares also gathered momentum because of the exports of the production from this group, Ahmed said. Muhammad Saeed Khalid, head of research at Shajar Capital, said the market remained bullish with index hitting an intra-day high of 377 points.

“The benchmark index performed mainly on the announcement of cement numbers along with the positivity on the construction side as the Prime Minister Imran Khan unveiled Rs1.10 trillion worth of package for the development and infrastructure projects in Karachi and Sindh,” Khalid added.

The top gainers were Unilever Foods, grabbing Rs500 to close at Rs13,000/share, and Nestle Pakistan, up Rs189 to finish at Rs6,499/share, while Sapphire Fibre, down Rs63.15 to close at Rs778.85/share, and Sapphire Textile, losing Rs40.98 to close at Rs800.92/share, were the main losers.

Power Cement led volumes with 72.409 million shares, up Rs1 to end at Rs10.85/share, whereas TRG Pakistan Limited recorded the lowest turnover with 19.850 million shares, but gained still Rs0.02 to end at Rs61.85/share.