KSE-100 gains 237 points on expected tax measures

KSE-100 gains 237 points on expected tax measures

The KSE-100 Index of Pakistan Stock Exchange (PSX) has gained 237 points on Monday in the anticipation of expected tax measures. The benchmark index ended 39,544 points, up from 39,307 points.

The market’s bullish performance was largely driven by the anticipation of forthcoming tax measures aimed at stimulating the equity market, boosting investor confidence, and driving economic growth.

Analysts at Arif Habib Limited noted that the market’s upward trajectory was influenced by several key factors. Firstly, positive news concerning financial support from friendly countries in the Gulf region contributed to the upbeat sentiment. Additionally, there was growing anticipation of China’s support and investment in the Pakistani market, further fueling optimism among investors.

The Energy and Petroleum (E&P) sector benefited from the surge in international crude oil prices, leading to a stronger performance in the stock market. Key players in this sector, including Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL), recorded notable gains, with trading volumes of 4 million and 3.1 million shares, respectively.

Furthermore, investors were buoyed by the expectation of improvements in the Core Delta segment of Engro Polymer and Chemicals Limited (EPCL), which helped the stock reach new highs. In the final trading hour, a surge in trading activity pushed EPCL’s share price above 41, a significant milestone for the company.

However, the cement sector faced challenges due to the anticipation of disappointing financial results and concerns about the potential impact of measures expected to be introduced in the upcoming mini-budget. These factors contributed to a decline in this sector’s performance.

The overall market performance was driven by several key sectors, with Banks (+120 points), E&P (+116 points), Autos (+34 points), Fertilizer (+32 points), Power (+14 points) leading the gains. In contrast, Cement (-45 points), Insurance (-17 points), and Refinery (-15 points) sectors saw declines in their performance.

While the PSX reported a decline in trading volumes from 155 million shares to 124 million shares, the average traded value increased by 17% to reach $43 million, up from $36.9 million. Notably, specific stocks played a significant role in driving the trading volumes, with K-Electric (KEL), Fauji Fertilizer Limited (FFL), Bank of Punjab (BOP), TRG Pakistan, and Pakistan Accumulator (PACE) collectively forming 35% of the total trading volumes.

The market’s optimistic outlook can be attributed to the expectations of tax measures in the upcoming mini-budget, which are likely to introduce reforms and incentives aimed at revitalizing the stock market. Such measures have the potential to boost investor confidence, promote investment, and contribute to economic growth in Pakistan.

Investors and market participants are closely monitoring developments related to the mini-budget and the tax incentives it may bring to the equity market. These potential reforms could further strengthen the Pakistani financial market, making it more attractive to both domestic and international investors.

The PSX’s robust performance on Monday was driven by investor optimism surrounding expected tax measures in the upcoming mini-budget. The market anticipates that these measures will create a favorable investment climate, stimulate economic growth, and improve overall market performance. As the financial sector continues to evolve, it remains crucial for investors and market participants to stay informed and adapt to the changing landscape of the Pakistani stock market.