Daily Times

Bulls dominated at the Pakistan Stock exchange on the second trading day of the year as index crossed 42000 points. The benchmark index gained 1,080 points to close at 42,480-level.

Mutual Funds were the major buyers and reason for today’s rally as the underweight funds and banks took major positions for the year ahead encouraged by the market optimism and speculation that the index will cross 60,000 mark in 2020.Mutual funds bought $8million worth of equities followed by Banks taking positions worth $4.1million.

The KSE 100 Index closed the previous year as one of the best-performing indices in the region with a 9.9% return. This news particularly bolstered investor sentiments and sparked a rally on the very first trading session of the year and continued for the second day as well. However, in the last four months of last year the market surged by 38% or 11,172 points.

Gaining 1,143.73 points, the KSE-100 index recorded its intraday high at 42,543.73. It ended higher by 1,080.76 points at 42,480.76. The KMI-30 Index clenched 1,999.88 points or 2.98pc to close at 69,068.76, while the KSE All Share Index added 593.00 points, ending at 29,872.97.The overall market volumes inflated from 330.74 million in the previous session to 412.35 million. Shares worth Rs17.06 million were traded in Thursday’s session. The Volume chart was led by K-Electric Limited, followed by The Bank of Punjab and Pak Elektron Limited, exchanging 46.83 million, 27.92 million and 21.48 million shares, respectively. Sectors that propped up the index includes banking adding 331.63 points, oil and gas exploration 132.75 points and power generation & distribution 107.26 points.

Among the companies, Hub Power Company Limited, Habib Bank Limited and Engro Corporation Limited remained the top contributors to the index.

Meanwhile, The State Bank of Pakistan (SBP) announced amendments in the Income Tax Ordinance, 2001, to simplify the tax regime for non-resident companies. The decision is designed to further encourage foreign investment in debt instruments and government securities.

“These amendments aim to deepen our capital markets, support the availability of long term rupee financing sources, support competition in the local currency debt market, and diversify the source of funding for the government,” said a statement issued by the State Bank of Pakistan.

As per the SBP, the existing foreign exchange framework allows non-residents to invest in debt instruments and government securities through Special Convertible Rupee Account (SCRA) maintained in Pakistani banks. There is no restriction on repatriation of funds from SCRA’s which incentivizes investment in the local debt market by non-resident investor.

In Asia, stock markets traded mixed amid lingering hopes over expectations the trade deal between U.S. and China would be signed soon. Investors’ sentiments were weak as the New Year rally lacked momentum.

The Shanghai Composite closed gained 1.15% to close at about 3,085.20 marking a two year high after private survey showed manufacturing activity in country rose in December. The Markit/Caixin Purchasing Managers’ Index (PMI) for manufacturing in the month of December came in 51.5, versus 51.8 in November. The 50 mark separates expansion in contraction in PMI readings. In South Korea Kospii index lagged the general upward trend regionally as it fell 1.02% to end its trading day at 2,175.17, with shares of automaker Hyundai Motor dropping 2.07%.Hong Kong’s Hang Seng gained 1.16%, as of its final hour of trading, with shares of life insurer AIA surging 3.24%. Nikkei 225 lost 0.76% to close at 23656.62 amid negative economic indicators.