The shares market on Monday found a long-awaited trigger in the face of the government's budgetary incentives that helped fertiliser and textile stocks lead the day's rally. Still volatile, benchmark KSE-100 index increased by 129 points to a record high of 37,352 compared to 37,223 of Friday last week. The number of shares traded on ready-counter was recorded at 227 million the value of which depreciated to Rs 11.95 billion. Of the 371 scrips traded, 158 rose, 198 declined and 15 remained unchanged.
With Market capital accumulating almost flat to Rs 7.53 trillion, the foreign portfolio investment marked net selling of $0.298 million. K-Electric, which ended up at Rs 8.17, led volumes with 56 million of the power utility's listed stocks. Other most-traded issues were Lotte Chemical, Fauji Cement, Fatima Fertiliser, SNGPL, Nishat Mills, Adamjee Insurance, Fauji Fertiliser Bin Qasim, Engro Fertiliser and Nishat Chunyan.
Trade on futures market moved southward to have stood at 35 million from the previous day's 42 million contracts. "Stocks closed on new highs led by fertilisers and textile stocks in the post budget rally at PSX after the government slashed sales tax rates on fertilisers and zero rated textile exports," said Ahsan Mehanti at Arif Habib Corp. The analyst said that positive sentiments on likely MSCI upgrade, falling leverage costs and over Rs 1.6trn record spending plans in the federal budget played a catalyst role in bullish close.
Hammad Aman, manager equity sales, at Topline Securities, attributed the record-breaking bull-run to investor positive expectation on Pakistan's entry into emerging markets in upcoming MSCI decision, to be announced on June 14. "As cut in General Sales Tax was presented in federal budget for fertiliser sector, ENGRO, FFC and FATIMA closed up by 1.7, 3.85 and 4.4 percent," he said. The government has proposed a fixed Rs 1 per kilogram for cement instead of 5 percent variable. DGKC and MLCF decreased by 1.25 and 0.84 percent. It is also proposed that all capital gains for insurance companies would be taxed at corporate tax rate which is 31 percent. This, Aman said, would have a negative impact. AICL hit its lower limit today but closed down by 3.67 percent.
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