The benchmark KSE-100 index accelerated by 958 points this week and settled at 40,265 points, providing a WoW return of 2.44%, as sentiment improved on account of the economic reforms package announced by the government.
The Finance Supplementary (Second Amendment) Bill, 2019 was broadly focused on improving ease of doing business, incentivizing export-oriented/industrial sectors and elimination of domestic growth hampering impediments.
A key demand from the stock market to abolish the advance tax of 0.02% was accepted, while the gov’t also allowed capital losses to be carried forward for three years, thereby impacting the investor sentiment positively.
Various other measures (such as abolition of super tax for non-banking companies, withholding tax abolishment for filers on banking transactions) all contributed towards improving the overall confidence in the equity bourse. Meanwhile interest from foreigners also propelled the market’s performance.
Analysts at Arif Habib Limited said that the Positive contributions to the index were led by Commercial Banks (559pts), Oil & Gas Exploration Companies (133pts), Fertilizers (97pts), Automobile Assemblers (66pts), and Power Generation and Distribution (66pts).
On the flip side, major sectors under pressure remained Oil and Gas Marketing Companies (-24pts) and Insurance (-15pts). Scrip wise top contributors were HBL (232pts), UBL (142pts), MCB (79pts), PPL (76pts) and HUBC (61pts).
Foreign investors accumulated USD 17.0mn this week compared to a net sell of USD 9.4mn last week.
Major buying was witnessed in Commercial Banks (USD11.4mn), Exploration and Production (USD 1.1mn) and Fertilizer Sector (USD 0.9mn).
On the domestic front, major selling was reported by Individuals (USD 7.4mn), Banks / DFIs (USD 3.4mn) and Insurance (USD 3.4mn).
Volumes during the week settled at 168mn shares (up by 43% WoW) whereas value traded arrived at USD 53mn (up by 32% WoW).
Other major news attracted equity market: Mini-budget aims to revive business sentiment, UAE transfers USD 1bn to boost Pakistan’s liquidity, reserves, Money laundering to be made non-bailable offence, IMF lowers growth forecast for Pakistan, region, In a first, Port Qasim berths two LNG vessels in one day.
Analysts expect that the market likely to continue its positive rally on the heels of improving foreign inflows in the local equity bourse. Furthermore, foreigners to remain net buyers during next week as well.
Moreover, a likely unchanged discount rate announcement in the upcoming monetary policy is also likely to keep the jubilance intact.