Power and energy stocks propel the bullish trend
The government’s announcement of resolving the power sector’s circular debt issue and extending of amnesty scheme for the construction sector saw the Pakistan Stock Exchange’s KSE-100 Index climb over 1,100 points during the day.
The benchmark KSE-100 index gained 680 points on Friday to cross the 44,000-mark after 32 months. It closed at 44,435 points.
The index went up by 1,120 points during the day before profit-booking took place, according to Saqib Hussain, a senior research analyst at Akseer Research. The last time the index was at this level was in May 2018.
“The announcement to resolve the circular debt issue and the extension of amnesty scheme were the main reasons for the rally during the day,” Hussain said.
The government will be settling a circular debt of Rs450 billion with power generation companies called IPPs in three installments during the year.
On Thursday, it announced an extension in amnesty scheme for the construction sector till June 2021. The scheme was scheduled to expire on December 31.
Karim Punjani, another research analyst, agreed that these two reasons played a major role in helping the KSE-100 index move up. Punjani, however, said that the rally was powered by the “January effect” too.
Stock markets usually perform well during the month of January, according to the analyst.
He said the news of the resolution of circular debt issue not only drove the power sector stocks, but it also pushed oil and gas exploration and marketing companies such as the OGDCL and the PSO.
Punjani said that other stocks such as banks also performed well. It was due to the positive sentiment in January, he added.