Stocks end higher ahead of mini-budget, blue-chip shares shine

Stocks rose on Thursday, led by gains in fertilizer, cement and financial stocks, although trading volume dropped sharply on the eve of IMF-back supplementary budget, dealers said.

Pakistan Stock Exchange (PSX)’s benchmark KSE-100 index gained 156 points or 0.35 percent to close at 44,416 points against 44,260 points in the last trading session.

The traded volume decreased to 43 million shares against 271 million shares traded in the previous session.

The trading value showed upward trend to go up to Rs10.341 billion compared to Rs8.156 billion whereas market capitalization inched up to Rs7.621 trillion compared to Rs.7.592 trillion.

Out of 373 trade scrips, 202 posted gains, 149 turned negative and 22 remained unchanged.

“Pakistan equities started the day on a positive note whereas market remained in the green zone throughout the day,” brokerage Topline Securities said in a post market note.

“Investors showed interest in blue chips stocks ahead of year end and the benchmark index made an intraday high at 44,590 points level before settling low.”

The brokerage said technology, fertilizer and banking sector’s stocks led the show where TRG, Engro, SYS, and UBL cumulatively added 140 points.

Cabinet had approved a supplementary or mini budget to end exemptions on sales tax and levy new duties to win $1 billion funding from the IMF.

The IMF agreed to revive Pakistan’s funding programme but demanded further budgetary tightening before the next tranche could be approved.

Brokerage Arif Habib Limited said index stayed in the green zone ahead of mini-budget.

“Cement sector remained in the limelight as it rallied in the first trading hour due to reduction in international coal prices.”

It added that MEBL in banking sector stayed in the limelight as the State Bank of Pakistan (SBP) for the first time has introduced Shariah complaint liquidity facilities for Islamic banking institutions

to enable them to offer better returns and rate to their customers on despoits and loans.

Moreover, activity continued to remain side-ways as market witnessed hefty volumes in the third tier stocks.

Sectors contributing to the performance include technology and communication (+79 points), commercial banks (+60 points), fertiliser (+44 points) cement (+32 points) and tobacco (+16 points).

Stocks that contributed significantly to the volumes include KEL, TREET, TRG, CNERGY and PRL

Brokerage JS in its market wrap noted that bulls made a comeback and the index eventually closed at the level of 44,416, gaining 156 points.

JS said traded volumes stood at 243 million shares where KEL (0.9 percent), TREET (3.0 percent), TRG (3.2 percent), CNERGY (-3.3 percent) and PRL (2.1 percent) cumulatively contributed 33 percent to the total volumes.

It recommended investors to avail any downside as an opportunity to buy in banking, E&P and cement sectors.

The Sapphire Tex gained the highest Rs78.80 in its share value to close at Rs1072 followed by Sapphire Fiber registered Rs57 increase in its share value to settle at Rs972.

The highest decline was witnessed in Colgate Palm which saw almost Rs178 decline in its value followed by Rafhan Maize whose share value went down by Rs100.