KARACHI: In contrast to trade and industry’s growing discontent over the fallout of the tax-heavy federal budget 2024-25 on economic growth, the stock market extended its record-setting spree for a second consecutive day on Wedne­sday, tossing the benchmark index above 80,000 on optimism of reaching an IMF deal this month.

Speaking with Dawn, Ahsan Mehanti of Arif Habib Corporation explain­ed that the equity market’s strong performance can be attributed to the government’s tax policies, which aim to attract both local and foreign investors.

“The tough measures in the federal budget FY25 have less affected the capital market,” he added.

“Investors anticipate record dividend payouts from state-owned enterprises and the power sector due to recent government initiatives to settle circular debt. An IMF bailout deal will help stabilise the rupee and manage debt rollovers,” he observed.

He said stocks closed at an all-time high in the corporate earnings season at PSX amid upbeat data on $30.7bn exports rising by 10.54pc and trade deficit narrowing by 12.3pc to $24.09bn in FY24.

He said the government timelines for privatising SOEs and expectations for strong corporate payouts also played a catalyst role in the record close.

However, protests are gro­w­ing over harsh taxation measures by key stakeholders, including exporters, ginners, builders, realtors, and petroleum dealers.

Topline Securities Ltd CEO Mohammed Sohail said many institutions were investing more funds in equities as the yields on government securities were coming down. Moreover, investors were hopeful that a long-term IMF programme would stabilise the economy and the country would be better positioned to overcome its economic challenges.

In its market report, Topline said the cement sector maintained its positive momentum, with positive growth for Kohat Cement, Pioneer Cement, Lucky Cement, and Maple Leaf.

However, domestic cement sales dropped 4.6pc to 38.18m tonnes in FY24, while export despatches surged by 56pc to 7.11m tonnes.

The banking sector attracted significant investor interest, with Samba Bank Ltd, Askari Bank Ltd, National Bank, Habib Bank, and JS Bank closing on a positive trajectory.

As a result, the benchmark index hit an intraday record high of 80,405.24 points and a low of 79,697.25.

However, the index closed at a new peak of 80,233.67 after rallying 680.78 points or 0.86pc on a day-on-day basis.

However, the overall tra­ding volume surged 29.87pc to 536.58 million shares. The traded value also rose 36.90pc to Rs22.72bn on a day-on-day basis.

Stocks contributing significantly to the traded volume included Pak Elektron (34.58m shares), The Bank of Punjab (31.46m shares), National Bank (21.22m shares), AKD Securities (15.08m shares) and K-Electric (13.99m shares).

The shares registering the most significant incre­ases in their share prices in absolute terms were Nestle Pakistan (Rs129.41), Philip Morris (Rs54.80), Exide Pakistan (Rs51.60) Atlas Honda (Rs39.01) and Mari Petroleum (Rs36.64).

Foreign investors turned net buyers as they purcha­sed shares worth $3.57m.

Published in Dawn, July 4th, 2024