In line with expectations, the Pakistan stock market staged a handsome rally of over 700 points on Monday, powering past the 39,200 mark.
The bullish momentum came after the government assured stockbrokers that it would do away with the regulations brought by the previous government in 2017 that shot down the high-flying Pakistan Stock Exchange (PSX). The initiative is aimed at breathing a new life into the crippling bourse.
Additionally, attractive stock valuations also encouraged investors to resume buying activity.
At the end of trading, the benchmark KSE 100-share Index recorded an increase of 737.58 points or 1.91% to settle at 39,299.63.
“Investors feel that the government’s promise in yesterday’s (Sunday) meeting regarding capital gains tax (CGT) and turnover tax may help restore positive sentiments,” Topline Securities CEO Mohammad Sohail told The Express Tribune.
Seasoned brokers Arif Habib and Aqeel Karim Dhedhi had anticipated the rally following the meeting with Prime Minister Imran Khan and Finance Minister Asad Umar at the Governor House Sindh on Sunday.
Umar told meeting participants that the government had prepared all the regulations required to do away with the wrongdoing with the PSX. The new regulations are aimed at rationalising taxes on stock trading which would come into effect by the end of current month.
Elixir Securities’ analyst Murtaza Jafar said value-hunting was observed across the board as investors cheered the latest promises made by the prime minister and finance minister during their trip to the PSX.
“While larger concerns over the economy remained in place, the assurance of relaxation provided much-needed breather to the market,” said Jafar.
Energy stocks contributed most of the gains to the trading session after the Organisation of Petroleum Exporting Countries (OPEC) decided to reduce crude oil production by 800,000 barrels per day while another cut of 400,000 barrels per day was announced by non-OPEC members, taking total production curbs to 1.2 million barrels.