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March 6, 2021

Stocks soar as PM seen passing political litmus

Business

March 6, 2021

Stocks managed a mighty rally on Friday mostly on bets the premier is set to ace his critical political test on Saturday, dealers said.

KSE-100 shares index gained 1.23 percent or 558.81 points to close at 45,837.35 points at Pakistan Stock Exchange (PSX), while traded volume and value stood at 316 million shares and Rs15.9 billion respectively.

Topline Securities in its daily market review said stocks rebounded on last trading day of the week on expectations that Prime minister Imran Khan was well-positioned to win the vote of confidence from National Assembly after Senate vote upset, where government’s candidate Hafeez Shaikh lost to opposition candidate Yousuf Raza Gilani.

Tracking the main market, KSE-30 shares index also jumped 1.46 percent or 275.54 points to close at 19,173.83 points.

Ahsan Mehanti at Arif Habib Corp said stocks staged a sharp recovery led by scrips across the board on investor speculations over positive outcome of vote of confidence on Saturday.

Surge in global crude oil prices, upbeat cement and oil sales, rupee recovery, and hopes of easing political concerns spurred buying, Mehanti added.

As many as 409 scrips were active of which 295 advanced, 88 declined and 26 remained unchanged.

Arsalan Soomro at KASB Securities said Prime Minister's bold move to garner support from the lower house should hopefully reduce the uncertainty around domestic politics and pave way for structural reforms impending before IMF review is concluded.

Therefore, across the broad greenery was witnessed as investors took the dip as a buying opportunity, he added.

“Expectations of payments to the Independent Power Producers allowed Pakistan State Oil to gain 1.13 percent, Kot Addu Power Plant 7.4 percent and Hub Power Company 0.9 percent,” Soomro said.

According to media reports, Power Division has advised to withhold payments to IPPs under NAB investigations. However, NAB had apparently expressed satisfaction after government negotiation team briefing NAB's officials on the matter.

However, sentiment is likely to remain a bit lukewarm on this front until the actual payments are made and reflected in the liquidity of power sector.

Analysts expect Monday to open on a good note if PM secures the required number of votes. Any surprise could create massive political impasse for prolonged period.

“Going forward, we foresee the market to remain volatile till the heated political environment cools down,” an analyst at Pearl Securities said.

Rafhan Maize, securing Rs200 to close at Rs10,200/share, and Sunrays Textile, grabbing Rs73.01 to close at Rs1,147.59/share, gained the most in the day.

Colgate Palmolive, losing Rs100 to close at Rs2,800/share, and Sapphire Textile, shedding Rs79.65 to end at Rs982.35/share, posted worst losses.

Azgard Nine Limited saw a trade of 29.246 million shares to become the most traded stock of the day. It gained Rs1.05 to close at Rs33.95/share. TRG Pakistan was the second highest traded stock with 21.08 million shares. It gained Rs3.1 to close at Rs145.81/share. Pakistan Refinery was third with a turnover of 17.89 million shares. It gained 53 paisas to finish at Rs26.64.