Bull run at PSX as stocks gain over 1,000 points | Pakistan Today

Bull run at PSX as stocks gain over 1,000 points

–Market analysts believe this rally will be short-lived

KARACHI: After days of volatile trading, the Pakistan Stock Exchange (PSX) made a much-needed recovery on Wednesday and gained over 1,000 points.

The rise was attributed to reports that the government is mulling the establishment of a market support fund in order to stabilise the exchange.

Moreover, as per media reports, a positive response is expected from the Financial Action Task Force (FATF) team, which recently held meetings with the Pakistani delegation in China.

The clarity on the International Monetary Fund (IMF) programme also strengthened the investors’ confidence.

The KSE 100 index benchmark logged in the highest single-day gain for 2019, as it surged by 3.62pc to reach an intraday high of 34,698.56. It closed higher by 1,195.04 points at 34,637.14. The KMI 30 index surged by 2,673.88 points to end at 55,866.34, while the KSE All Share index closed higher by 711.71 points, settling at 25,529.10.

The overall trading volumes increased from 153.45 million in the preceding session to 203.38 million (up by 33pc). The Bank of Punjab (BOP +5.06pc), Worldcall Telecom (WTL +1.25pc) and K-Electric Limited (KEL +8.42pc) were top traded stocks of the day. The scripts had traded 25.08 million shares, 20.15 million shares and 15.75 million shares respectively.

The cement sector gained 5.20pc in its cumulative market capitalization. Lucky Cement Limited (LUCK +5.00pc) and Bestway Cement Limited (BWCL +4.99pc) touched their upper circuit breakers, while DG Khan Cement Company Limited (DGKC +4.99pc), Fauji Cement Company Limited (FCCL +6.46pc) and Attock Cement (Pakistan) Limited (ACPL +4.99pc) also closed with decent gains.

Maple Leaf Cement Factory Limited (MLCF) was up by 4.95pc. The company, in a notification sent to the exchange, announced the commencement of operations from its additional dry process clinker production line. The line, having a grey clinker production capacity of 7,300 tonnes per day, has been added as part of the company’s brownfield expansion at its current site in Iskanderabad.

Capital Stake Director of Research Maha Jafer Butt told Pakistan Today that “after a long selling spree the market is seeing some recovery. On the economic front, a lot of things have cleared up in the past few days including the International Monetary Fund (IMF) programme, monetary policy and now media reporting positive response expected of the FATF meeting. Also, blue chips are trading at attractive valuations for investors to grab. Both of which have contributed towards the positive movement of the KSE 100 index.”

Market analysts believe that this rally will be short-lived and the budget measures will soon dampen the economy as a whole.

Pak Kuwait Investment Adnan Sheikh AVP Research said, “The index jumped in anticipation of a bailout fund, along with chances of Pakistan being removed from the FATF greylist in June.”

He added, “High net worth individuals have been buying ahead of institutions. Over the last two days alone individual buying stood at $6.5 million while insurance companies bought $2.4 million worth.”

“Interestingly funds have remained net sellers during this period.” He added further, there are a lot of short sellers in the market trying to recover their positions as well in the anticipation of a short term rally.”

The State Bank of Pakistan (SBP) on Monday announced its monetary policy for the next two months. Interest rates increased by 150 basis points to a 91-month high in anticipation of further inflation under the IMF’s bailout programme.



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