Stocks rally despite terror attack on PSX building
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KARACHI: The early morning terrorist attack on the Pakistan Stock Exchange (PSX) in the country’s commercial hub could not unruffle investors who refused to be distracted by the gunfire outside. For a moment due to early commotion, some nervous participants started to sell-off and quit which pulled the index down to intraday low by 220 points.
But those who maintained their sangfroid took it as an opportunity to buy blue chips at attractive levels. The market closed at its usual time with the KSE-100 index recording gains of 242 points (0.71 per cent) and settled at 34,181.80.
The index took a turn to the north as the law enforcement agencies in collaboration with the PSX security guards quickly neutralised the last of the four gunmen who only managed to reach the compound. The benchmark hit the intraday high by 267 points.
PSX Chairman Suleiman Mehdi, who coordinated in eliminating the attackers, expressed appreciation for the security agencies’ rapid response that foiled the terrorists’ attempt to enter the multi-storeyed building. “During the whole episode, the trading at the exchange continued without a minute’s interruption as brokers, traders and the staff showed no signs of panic and went about their job,” he proudly said.
Investor interest in the equities was underpinned by the slashing of the 100 basis points policy rate cut by the State Bank of Pakistan (SBP) to 7pc last week.
“Tracing from a lower inflation outlook of 6.5pc by SBP in FY21, results of recent auctions of government securities and decline in large-scale manufacturing amid the pandemic, the decision is in line with market expectations,” an analyst said. The cumulative reduction of 625bps in three months was primarily to counter the negative impact of Covid-19 on economic activities and businesses.
The cyclicals, cement and steel, were major beneficiaries of the rate cut due to their higher leveraged positions. Buying activity was observed in banks, cement and oil and gas marketing companies (O&GMCs).
Another major gainer was the oil marketing sector as the government raised the price of petrol by Rs25.58 per litre in line with strengthening international rates.
Investors’ interest was also seen in the auto sector where Pak Suzuki closed at its respective upper circuit. An important event during the day was the presentation of the Federal Budget 2021 in the National Assembly, which finally received approval, setting market’s concerns at rest.
In the heavyweight exploration and production (E&P), Pakistan Oilfields closed in the negative trajectory whereas Oil and Gas Development Company (OGDC) and Pakistan Petroleum finished in the green zone. Moreover, mixed sentiment was seen in fertiliser where Engro Corporation ended with gains.
Traded value declined 17pc over the previous session to $33 million while the volume stood lower by 21pc at 157m shares. Major contributions came from Hascol Petroleum, Sui Southern Gas, DG Khan Cement, Maple Leaf Cement, Hum Network and Pakistan State Oil.
Sectors contributing to the bullish performance were O&GMCs, rising by 74 points, cement 37 points, banks 35 points, autos 25 points, E&P 21 points. Top gaining scrips included Engro Corporation, up 0.1pc, OGDC 0.5pc, MCB 0.6pc, Lucky Cement 1.7pc and Pakistan Petroleum 0.8pc.
Published in Dawn, June 30th, 2020
