Stocks rise for 2nd day as PM’s relief package cheered

Stocks on Tuesday cruised ahead for the second day, riding a new wave of optimism, after the Prime Minister rushed to cool down inflation-ravaged masses and industries with medium-term relief on fuel, power, and taxes, traders said.

After scouting a high of 45,017.68 and a low of 44,461.01 points, KSE-100 Share Index, the benchmark of Pakistan Stock Exchange (PSX), closed at 44,803.58 points, up 342.57 points or 0.77 percent.

Topline Securities Ltd in a post-market note said equities opened with a gap up after the Prime Minister announced a cut in prices of petrol, diesel, and power, and also of tax concessions for industries.

KSE-30 index also gained 151.77 points or 0.88 percent to 17,464.64 points compared with 17,312.87 points recorded in the last session.

AKD Research in a research note said throwing austerity to the wind, Prime Minister Imran Khan in a televised address to the nation on Monday evening announced a respite to inflation-battered masses.

Populous measures were taken in the wake of a raging commodity cycle that saw oil prices exceeding $100/bbl recently, the brokerage said.

“The relief measures entail a cut in administered fuel prices by Rs10/ltr to Rs150/ltr and adjustments in monthly FCAs (fuel cost adjustments) on account of higher fuel prices, where the impact will be absorbed through subsidies.”

The total outlay was expected to be in the range of Rs250bn-300 billion (0.4-0.5 percent of GDP), which may slightly push the official fiscal deficit above 7.5 percent mark, the AKD Research said.

With a volumetric gain of 101 million or 48 percent, the number of traded shares billowed to 309.34 million from 208.12 million, whereas trading value also surged 73 percent to Rs10.448 billion from Rs6.063 billion. Future contracts turnover increased to 109.29 million shares from 71.81 million shares.

Market capital expanded to Rs7.681 trillion from Rs7.612 trillion. By the end of the day there were 226 gainers, 117 losers, and 21 neutrals.

Ahsan Mehanti, an analyst at Arif Habib Corp, said stocks closed bullish led by scrips across the board on Prime Minister’s relief package.

Rebounding global stocks and surging crude oil prices mainly fueled Tuesday’s rally, Mehanti said.

PPL, TRG, and OGDC cumulatively added 210 points to emerge as the major supporters.

On the results front, UNITY posted its unconsolidated 2QFY22 EPS (earnings per share) at Re0.9 compared to Re0.8 in 2QFY21 and LPS (loss per share) of Re0.02 in 1QFY22, which were lower than expectations. The TRG posted its consolidated 2QFY22 LPS of Rs23.11.

Colgate Palmolive was the top gainer of the session, jumping Rs138 to Rs2,310/share, followed by Rafhan Maize, up Rs125 to close at Rs11,125/share.

Indus Motor Co took the biggest hit of the day by falling Rs44.34 to Rs1,429.56/share, followed by Sapphire Textile, down Rs85.80 to end at Rs1,058.20 /share. According to a report by Arif Habib Ltd (AHL), the market stayed in the bullish zone throughout the day cheering a relief package worth 0.54 percent of the GDP unveiled by the premier.

“This development is aimed at curbing the impact of inflation and supporting the most vulnerable class of the society for the next four months,” the report said.

WorldCall Telecom was the most traded stock with 29.89 million shares, trailed by TPL Properties that saw its 19.15 million shares changing hands.

Among major traded stocks were TRG Pakistan Ltd, Telecard Limited, Ghani Global Holdings, TPL Corp Ltd, Oil & Gas Development Company, Agritech Limited, Fatima Fertiliser, and Treet Corporation.