KARACHI: Amidst political and economic uncertainty, the stock market staged a robust rally on Thursday, supported by better corporate results and falling yields on treasury bills.

Ahsan Mehanti of Arif Habib Corporation said the market surged as investors weighed up to 54 basis points cut in the yields of different tenors of the treasury bills in Wednesday’s auction.

This strengthened the market expectation of a further softening of monetary policy in the coming months as trade and industry players have continuously been demanding rationalisation of lending costs to revive economic activities.

He said strong corporate earnings and payouts in the oil sector also helped revived investor buying interest.

He said the bull run in global equities, the SBP governor’s assurance for the external sector manageable amid debt rollovers, the finance minister’s affirmation of economic stability and positive evaluation of credit rating agencies and likely IMF board approval for a new loan also contributed to the bullish close.

Topline Securities Ltd said the KSE index saw cherry-picking in initial trading as the cut in the T-bills rate brought the cement, steel, and auto sectors onto investors’ radars.

However, Mari Petroleum surprised the market with a higher-than-expected financial result and massive payout. Its stock price hit the upper circuit in a matter of minutes after the announcement, contributing the day’s highest 221 points to the index.

Oil and Gas Development Company and Pakistan Petroleum followed suit, adding 193 and 74 points to the index, respectively.

As a result, the benchmark index hit an intraday high of 77,969.27 points and a low of 77,085.48. However, it settled at 77,874.22 after adding 759.73 points or 0.99pc on a day-on-day basis.

The overall trading volume rose 10.18pc to 493.09 million shares. The traded value also surged 40.56pc to Rs25.84bn on a day-on-day basis.

Stocks contributing significantly to the traded volume included Kohinoor Spinning (93.86m shares), Fauji Fertiliser Bin Qasim (33.97m shares), Air Link Communication (25.14m shares), Oil and Gas Dev­elo­pment Company (24.25m shares) and K-Electric (20.71m shares).

The shares registering the most significant incr­eases in their share prices in absolute terms were Mari Petroleum Company Ltd (Rs259.89), Mehmood Textile Mills Ltd (Rs57.13), Khyber Textile Mills Ltd (Rs48.56), PIA Holding Company [B] (Rs45.34) and Leiner Pak Gelatine Limited (Rs41.11).

The companies registering significant decreases in their share prices in absolute terms were Reliance Cotton Spinning Mills Ltd (Rs47.99), Hallmark Company Ltd (Rs21.85), Rafhan Maize Products Company Ltd (Rs21.71), Philip Morris (Pakistan) Ltd (Rs17.66) and Sapphire Textile Mills Ltd(Rs16.64).

Foreign investors remained net buyers as they bought shares worth $0.21m.

Published in Dawn, August 9th, 2024