Shares had been within the inexperienced on Monday with the benchmark KSE-100 index climbing 585 factors, buoyed up by cement shares and an encouraging Monetary Motion Activity Power (FATF) announcement on Friday, to shut at 41,850 – up 1.four per cent.
“The market optimism was primarily driven by the appreciation of cement and construction-related stocks,” stated Head of Analysis at BMA Capital, Faizan Ahmed, whereas talking to Daybreak.
“Southern cement manufacturers’ decision to increase per bag prices by Rs10 coupled with the news on shortages in some cities have pushed up the prices of cement stocks.”
However, the most important participant within the cement sector, Fortunate Cement Ltd, reported a higher-than-expected bounce in web earnings throughout 1QFY21 at Rs5.13 billion in comparison with Rs1.5bn throughout the identical interval final 12 months. The corporate’s web gross sales elevated 66 per cent year-on-year (YoY) with cement gross sales rising 49laptop on the again of upper dispatches.
The announcement put a highlight on the general sector amid rising demand for cement on account of a rise in development actions.
Autos and oil & fuel advertising corporations additionally gained in anticipation of stronger gross sales in October.
The Monetary Motion Activity Power’s announcement on Friday, when it acknowledged steps taken by authorities towards cash laundering and terror financing, was additionally obtained effectively by traders who had been jittery over the last week. The worldwide anti-money laundering watchdog stated Pakistan had efficiently complied with 21 out of 27 factors of motion even because it urged authorities to “swiftly complete its full action plan by February 2021”.
“While the FATF’s decision of keeping Pakistan on the ‘grey list’ was widely expected, the market cheered the formal acknowledgement of the progress made so far and the risk of blacklisting being largely over,” stated Umer Farooq, analyst at AKD Securities.
Farooq additionally attributed in the present day’s rally to the earnings shock posted by Fortunate Cement Ltd, whereas “healthy payouts in the IPP space and earnings growth by companies in the pharmaceutical sector” additional bolstered sentiment on the bourse, in response to him.
Minister for Industries and Manufacturing Hammad Azhar, commenting on in the present day’s rally, amongst different issues, tweeted:
“Rally in the stock market, appreciation of the rupee in currency markets, strong growth in industrial sectors like cement, automobiles, construction, fertiliser, textiles etc. point towards a positive economic sentiment in the country. Tax revenues are also rising and current account [is] in surplus.”