KARACHI – The Pakistan Stock Exchange (PSX) remained in a bullish mode on Tuesday as investors held optimistic expectations regarding the upcoming mini-budget or economic reform package.
The benchmark KSE-100 index gained 358 points, closing at 39,902 points, surpassing the previous day’s closing level of 39,544 points.
The current government is set to present its second mini-budget, which has been described as an economic reform package, on January 23, 2019. During a recent visit to Karachi, Finance Minister Asad Umar hinted at positive developments for the stock market within this reform package, generating anticipation and excitement among investors.
The key focus of this optimism is the expected abolition of the advance tax on the sale and purchase of shares, a measure that has been a point of contention for market participants. Additionally, there are hopes for changes in the capital gains tax regime, which could further benefit the equity market.
Analysts at Arif Habib Limited noted that the KSE-100 index sustained its upward momentum due to the positive expectations related to the mini-budget. Market activity was observed across various sectors, with particular attention given to Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL). These companies have been favored by international crude oil price trends, which have provided a positive outlook for the energy sector.
However, Pakistan Oilfields Limited (POL) experienced a slight dip in its stock price following the announcement of its half-yearly results, which were lower than market expectations. Nevertheless, the company’s performance should be viewed within the broader context of evolving market dynamics.
The banking sector remained robust, with Habib Bank Limited (HBL) and United Bank Limited (UBL) continuing their rally. Both banks achieved recent highs above 140 and 145 levels, respectively, reflecting positive investor sentiment.
Within the chemical sector, Engro Polymer and Chemicals Limited (EPCL) witnessed growth due to an increase in weekly margins. Another chemical company, LOTCHEM, although restrained, garnered healthy demand at a certain price level below 13.
Sectors that contributed significantly to the market’s performance included Banks (+158 points), Fertilizer (+48 points), Power (+39 points), Cement (+32 points), Exploration and Production (E&P) (+17 points), and Pharma (-12 points).
Market volumes saw a rebound, increasing from 124.4 million shares to 136.7 million shares, reflecting a 10 percent day-on-day growth. The average traded value also rose by 14 percent, reaching $49 million compared to the previous $43 million.
Several stocks played a crucial role in the day’s trading volumes, including TRG, Fauji Fertilizer Company Limited (FFL), K-Electric Limited (KEL), Bank of Punjab (BOP), and EPCL. These stocks collectively accounted for 33 percent of the total trading volumes.
The prevailing bullish sentiment in the Pakistani equity market is a testament to investor confidence and hopes for favorable reforms that could further bolster the country’s economic stability and the prosperity of its capital markets.
