Triple digit cut in interest rate allowed the benchmark to gain 3.3 per cent during early trade, wherein majority stocks either traded, or managed to stay at upper locks, although high priced stocks failed to gather enough strength to manage “touch-down”. Substantial gains were however recorded, as post midday stagnation led to day-end off-loading, thus forcing the benchmark to register an adjusted, yet positive close.
KSE 100 index closed at 12092.32 levels after gaining 238.48 points, while KSE 30 index gained 267.61 points to close at 11634.34 levels. All Share index closed at 8374.58 levels after gaining 157.78 points. Total 194 scrips advanced 89 declined and 93 remain unchanged out of total 376 scrips traded.
Major hand shift on strength did pour in substantial turnover, wherein volume leaders from mid 90s reemerged as the volume leaders, PTC led the turnover with HUB CO being the runners up, as both the stocks jointly contributed more then 30 per cent to the total turnover. While sector and stock swapping by the local corporate and high net worth participants along with fresh float by the off-shore participants led to intra-day adjustment.
Denial by IMF on issuing LOC, a mandatory document for ensuring smooth business with various international donors, forced the equity participants to place the liquidity in comparatively safer stocks, ensuring growth and consistent yields. The follow-up events that kept the market men in accumulation mode include likely resolution of circular debt, with the fruits of exit from IMF reign, ripening fast with the substantial decline in interest rates, and expectations of lenient view on CGT implementation mode. All this kept the resident participants in a buoyant mood despite higher chances of increased sell-off by the off-shore participants mainly by those who follow IMF’s certification for investments. Hasnain Asghar Ali at Aziz Fidahusein said caution however stays intact as the government’s contingency plan to keep economic engine running in an environment wherein support of international lenders could come to a halt, along with cold relations with US, yet to be unveiled, selective accumulation is recommended in the stocks likely to benefit from the expected jumpstart in the economy with the aggressive cut in interest rate. The highly leveraged companies along with manufacturing concerns are likely to benefit from increase in trade numbers with India, as the financing arrangements will be restated at cheaper rates. However strength in high priced stocks is likely to continue facing tough operational issues mainly due to high and expensive debt and gas curtailment, that is likely to intensify with the winter season around the corner should be avoided for the time, he added.
