Stocks up on budget clarity; down 12 percent in FY22

Stocks rose on Thursday in volatile trade as clarity on the latest amendments in the Financial Bill 2022 put the wary investors off the hook and on a value-hunting safari, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index gained 243.10 points or 0.59 percent to 41,540.83 points after testing a high of 41,559.06 and a low of 41,220.01 points.

Arif Habib Ltd in a post-market note said the stocks gained on rupee strength and easing cut-off yields for short-term treasury bills compared to the previous auction.

Investors opted for value hunting due to clarity on the finance bill amendments approved by the National Assembly, the brokerage said.

“Volumes continued to remain dull, on the contrary, 3rd tier stocks remained in the limelight,” it said.

According to Topline Securities, the benchmark index witnessed the largest decline after eight quarters where the index was down by 8 percent QoQ basis.

“It was also down 17 percent in dollar terms in 2Q2022,” the brokerage said in a quarterly/yearly review of the stocks.

It said delay in the IMF programme, increased political uncertainty, rise in inflation, and expanding Current Account Deficit continued to impact the market during the quarter.

“KSE-100 index was down by 12 percent in FY22 as against an increase of 38 percent in FY21,” it added.

The KSE-30 index also increased by 108.42 points or 0.69 percent to 15,805.04 points.

Traded shares rose by 50 million shares to 192.897 million shares from 142.192 million shares. The trading value increased to Rs6.786 billion from Rs5.347 billion. Market capital expanded to Rs6.956 trillion from Rs6.922 trillion. Out of 337 companies active in the session, 168 closed in the green, 140 in the red, while 29 ended unchanged.

Analyst Nabeel Haroon at Topline Securities said lacklustre activity was observed in the last trading session of the month as the index traded sideways with low volumes for the most part of the day, however, some buying was observed at closing as investors came in to accumulate at an attractive valuation.

A major contribution to the index came from HUBC, ENGRO, UBL, BAHL and SYS, as they cumulatively contributed 121 points to the index.

The highest rise was recorded in the shares of Allawasaya Textile, which rose by Rs99 to Rs1,419 per share, followed by Sapphire Fiber, which increased by Rs75 to Rs1,075 per share. A major decline was noted in shares of Hinopak Motor, which fell by Rs11.77 to Rs307.20 per share, followed by ICI Pakistan, which dropped by Rs11.07 to Rs724.55 per share.

Sara Saeed, an analyst at JS Research, said that the local bourse witnessed another volatile session, where it closed at 41,541, gaining 243 points.

“Market is expected to remain range-bound due to the current political scenario and finalisation of a deal with the IMF. Going forward, we recommend investors to stay cautious but avail any downside as a buying opportunity,” she advised.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, stocks showed sharp recovery as investors weighed Rs9.6 trillion federal budget approval to revive the IMF bailout programme and firm treasury bond yields.”

Rupee recovery, reports of likely approval of foreign inflows and debt suspension kept the index ticking upwards, he said.

K-Electric Ltd was the volume leader with 17.495 million, followed by Agritech Limited with a turnover of 13.786 million shares.