Market watch: Stocks inch up on back of pharma companies

Benchmark KSE-100 index gains 69.40 points


Our Correspondent March 14, 2016
Benchmark KSE-100 index gains 69.40 points.

KARACHI: The stock market ended in the black on Monday as news of expected increase in drug prices sent many of the pharmaceutical shares to the upper cap for the day.

However, a decline in global crude oil prices pushed stocks of exploration and production (E&P) companies to the lower level. The Pakistan Stock Exchange’s benchmark KSE-100 index rose 0.21% or 69.40 points to end at 32,738.56.

According to Elixir Securities’ analyst Ali Raza, the equities closed marginally positive after volatile trading and on thin volumes after morning gains, which pushed the index to test near 32,900-point levels, fizzled out.

“Stocks opened positive as participants tracked higher regional markets, however, limited institutional interest during the day, particularly in index names, and late selling in exploration and production companies after the slide in global crude, led the benchmark index to gradually fill the gap.



“E&Ps (OGDC, PPL and POL) cumulatively erased over 68 points off the KSE-100 index, while oil marketing companies (PSO, Hascol and Shell) came under pressure on news of the oil and gas regulator opposing any increase in margins of oil marketing companies.”

On the flip side, Engro Foods (+5%) stood strong to close at the upper price limit while its parent company Engro Corp (+2.01%) also traded higher and contributed most to the day’s gains as participants anticipated that they would fetch a premium price from the foreign acquirer.

Meanwhile, JS Global analyst Ovais Ahsan said the index remained dominated by the bulls as the market made an intraday high of 209.50 points but lost most of it before close.

“Intraday rally could be attributed to the hike in international crude oil prices; however, the decline in crude prices to $39.50 per barrel in the second half forced major oil stocks to close in the red zone. Pakistan Petroleum (-0.59%) and Pakistan Oilfields (-2.30%) ended negative.”



Similarly, profit-taking was witnessed in the banking sector as Faysal Bank (-0.48%) and MCB Bank (-0.04%) closed in the red. On the other hand, The Bank of Punjab (+2.49%) rose on the back of news that an improvement in bad loan’s recovery was helping the bank make steady progress.

“Rally in the pharmaceutical sector was witnessed on the back of anticipation of a hike in drug prices as Searle (+5%) gained. Glaxosmithkline (+5%) rallied on the announcement of its scheme of arrangement of demerger, which will see its consumer health care division being spun off into a new entity.”

The automobile sector flourished on account of a weakening yen and a pre-result rally in Pak Suzuki (+2.52%).

Imposition of a definitive anti-dumping duty by the National Tariff Commission on the import of hydrogen peroxide originating from Bangladesh led Sitara Peroxide and Descon Oxychem to their upper circuit breakers, he said. “Going forward, we expect the positive momentum to continue.”

Trade volumes rose to 132 million shares compared with Friday’s tally of 116 million.

Shares of 342 companies were traded. At the end of the day, 163 stocks closed higher, 147 declined while 32 remained unchanged. The value of shares traded during the day was Rs6.3 billion.

NIB Bank was the volume leader with 23.7 million shares gaining Rs0.25 to finish at Rs2.15. It was followed by Dewan Cement with 10.2 million shares losing Rs0.31 to close at Rs12.71 and The Bank of Punjab with 9.2 million shares gaining Rs0.21 to close at Rs8.63.

Foreign institutional investors were net sellers of Rs283 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, March 15th, 2016.

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