KARACHI: The stock market extended an overnight bull run on Monday, the first day of the new fiscal year, despite trade and industry’s strong reservations about the tax-laden budget.
However, the equity investors celebrated the tax status quo on dividends and income, believing the budget’s approval has paved the way for smooth negotiations to secure a new IMF loan, which is crucial to avoid a default-like situation.
Topline Securities Ltd said the Pakistani stock market began trading positively but witnessed profit-taking in the session’s late hours at the day’s high level, trimming the early gains due to a spike in inflation and a rise in petrol prices.
However, the cement sector attracted investor interest. The manufacturers increased the 50kg bag price by approximately Rs125 in the south region from July 1 to offset the impact of higher federal excise duty imposed in the budget 2024-25. As a result, Kohat Cement and Pioneer Cement closed positively, while Lucky Cement, Cherat Cement, and DG Khan Cement closed negatively.
Key contributors to the positivity included Pakistan Petroleum Ltd, Engro Fertiliser, United Bank, Service Industries, and Pakistan Tobacco, which collectively contributed 274 points to the index.
Conversely, Engro Corporation, Lucky Cement, Mari Petroleum, Cherat Cement, and Thal Ltd. collectively lost 102 points.
Ahsan Mehanti of Arif Habib Corporation said the market rallied amid thin CPI inflation at 12.6pc year-on-year in June and the finance minister’s affirmation for a larger and longer bailout agreement with the IMF this month amid positive talks for a $6-$8bn deal.
He also noted that the government began preparing to issue $1.5bn panda and Euro/Sukuk bonds to seek foreign inflows and resolve circular debt crises, which were other factors that fuelled bullish sentiments on the PSX.
As a result, the benchmark index hit an intraday high at 79,536.23 points and a low of 78,427.80. However, the index closed at 78,824.33 after adding 379.37 points or 0.48pc on a day-on-day basis.
However, the overall trading volume fell 11.97pc to 305.03 million shares. The traded value, however, rose 15.51pc to Rs13.74bn on a day-on-day basis.
Foreign investors remained net sellers as they offloaded shares worth $1.64m.
Published in Dawn, July 2nd, 2024
