The KSE-100 index witnessed second highest single-day increase of 610.03 points on Wednesday and closed at 13,089.50 points on the back of government decision to give exemption on capital gain tax on listed shares for two years and to keep the current tax regime at share market unchanged.
The market opened on a positive note and the KSE-100 index hit 13,090.85 points intra-day high. The market remained at high levels during whole the session. The market witnessed healthy trading activity and the ready market volume increased to 205.305 million shares as compared to 158.564 million shares traded a day earlier. The futures market turnover however declined slightly to 35.582 million shares against 37.202 million shares on Tuesday.
Market capitalisation surged by Rs 185 billion to Rs 4.037 trillion. Trading took place in 402 scrips, out of which 349 scrips closed in positive and only 39 scrips closed in negative, while the value of 14 scrips remained unchanged. TRG Pakistan was the star performer of the day with 20.613 million shares trading and gained Rs 1.00 to close at Rs 8.00 followed by Norrie Textile which increased by Rs 0.54 to close at Rs 2.74 with 11.936 million shares.
IGI Investment Bank surged by Rs 1.00 to close at Rs 10.17 with 10.555 million shares. NIB Bank gained Rs 1.00 to close at Rs 13.57 with 7.429 million shares. Healthy buying was also witnessed in the exploration and production (E&P) sector, as OGDC increased by Rs 6.22 to close at Rs 130.72 with 9.143 million shares. Hub Power gained Rs 0.59 to close at Rs 32.79 with 6.594 million shares. Dewan Salman surged by Rs 1.00 to close at Rs 6.45 with 6.573 million shares.
Arif Habib Sec gained Rs 8.28 to close at Rs 173.98 with 6.526 million shares. Fauji Fertiliser Bin Qasim increased by Rs 1.72 to close at Rs 36.12 with 6.318 million shares. Nimir Industries Chemical closed at Rs 4.69, up by Rs 0.79 with 5.499 million shares.
Unilever and Nestle Pakistan were the highest gainers and gained Rs 81.00 and Rs 57.49 to close at Rs 2500.00 and Rs 1340.00 respectively while Siemens Pakistan and Hinopak Motor were the highest losers and lost Rs 65.00 and Rs 26.99 to close at Rs 1529.00 and Rs 521.01 respectively.
Hasnain Asghar Ali at Aziz Fidahusein Securities said that certainly it was an achievement for both the government and the investors getting a further exemption of already exempted tax without further increase in the prevailing taxes. It will certainly boost the confidence of local investors at the bourses.
Growth-oriented economic policies will invite not only the funds looking for avenues abroad but even the funds already invested in foreign lands might follow the opportunity. Stability of rupee will be a catalyst for foreign inflow once the local bourses start creating turnover.
Reduction in CVT, if proposed, would have allowed the turnover to join the rally with the growing market. Nevertheless the formation of the committee for developing long-term strategy for capital markets is likely to come up with results in three months if it shows the keen interest which the government is now taking in developing the local bourses.
Technically, oversold and fundamentally undervalued market opened with maximum points and sustained the numbers throughout the day, thus disallowing short covering to come into play. It is, therefore, recommended to accumulate main stocks, mainly those carrying high chances of healthy payouts. Budget commentary, however, will impact the market, as the cautious still await policy statements for taking big positions in economy.
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