Stocks gain on optimism over policy rate status quo

Stocks rallied on Friday as investors anticipate status quo in the upcoming monetary policy and incentives for business sector in the upcoming budget, dealers said.

Ahsan Mehanti at Arif Habib Corp said stocks closed higher on investor speculations ahead of monetary policy announcement next week and bull-run in global equities.

“Midsession pressure remained on rupee instability. However, record remittances of $2.8 billion in April 2021 and surging global crude prices played a catalytic role in the bullish close.”

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.75 percent or 340.91 points to close at 45,914.98 points. KSE-30 shares index gained 0.78 percent or 144.22 points to close at 18,719.15 points.

As many as 408 scrips were active of which 278 advanced, 110 declined and 22 remained unchanged.

The ready market volumes stood at 710.42 million shares compared with the turnover of 784.03 million shares in the last trading session.

An analyst at Arif Habib Limited said resolution of dispute between the members of ruling party as well as anticipation of tax incentives for the industries in the upcoming budget helped KSE-100 index put up a formidable addition of 374 points during the session.

Deferral of Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) for consideration of privatisation resulted in a rebound in stock prices of both stocks.

Banks, cement and steel sectors also contributed positively to the Index. The incentive proposal for the refinery sector gave way to National Refinery Limited (NRL), Attock Refinery (ATRL) and Pakistan Refinery (PRL) to post gains.

An analyst at Topline Securities said index witnessed a positive session on Friday.

“This optimism in the market can be attributed to announcement of monetary policy committee on May 28th, wherein market participants expect status quo.”

Neelam Naz at JS Global Capital said the KSE-100 Index remained volatile as it moved between a high and low of 45,948 and 45,560 respectively.

News that Pakistan Refinery (PRL) is ready to install up-gradation projects worth nearly $1.2 billion gained interest of market participants in the share. An important event in the coming rollover week is the monetary policy announcement on May 28th 2021.

“The market is likely to continue its bullish momentum in the next week. However, high volatility can be expected in the range of 46,400 to 46,900 points,” she added.

Companies reflecting highest gains included Nestle Pakistan, up Rs247.67 to close at Rs5,798/share, and Wyeth Pakistan, up Rs111.30 to close at Rs1,595.32/share.

Companies reflecting most losses included Island Textiles, down Rs69 to close at Rs2,231/share, and Bata Pakistan, down Rs50 to end at Rs1,750/share.

Highest volumes were witnessed in Worldcall Telecom with a turnover of 99.48 million shares. The scrip gained 12 paisa to close at Rs1.88 share.

Byco Petroleum was second with a turnover of 67.67 million shares. It shed 14 paisa to close at Rs10.12/share.

Hascol Petroleum was third with a turnover of 48.49 million shares. It gained 40 paisa to finish at Rs10.71.