Market watch: Oil and banks lead the way as index ends higher

Benchmark KSE-100 index rises 215.65 points

KARACHI: Stocks continued their upwards journey as increasing crude oil prices in the international market fuelled the bullish momentum, helping the benchmark-100 index close positive for a fourth successive session.

At close on Friday, the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index rose 0.63% or 215.65 points to end at 34,719.29.

Elixir Securities analyst Faisal Bilwani said the benchmark KSE-100 ended positive, cruising ahead as institutions remained aggressive buyers.



“A sideways open and directionless trading in morning session was followed by aggressive institutional buying in the post-morning session with gains primarily in financials: MCB Bank (+5%); Habib Bank (HBL +5%) and United Bank (UBL +2.3%).

“News of feed gas price reduction by regulator pushed fertilisers higher: Fauji Fertilizer (FFC +1.5%), Fauji Bin Qasim (FFBL +4.4%); Cements traded against wider market direction to close lower with Lucky Cement (-1.9%) denting the benchmark most (over 25 points).

“Oils were marginally positive at close as profit takers kept upside in check while Pakistan State Oil (PSO -1.8%) tanked after announcing disappointing quarterly earnings.

“We see volatile trading with investors tracking regional markets and global crude while wider market is likely to see resistance in an attempt to test 35,000. Inflation reading early next week will likely be a non-event and we see flows taking even more control over direction as quarterly announcements come to a close.”



Meanwhile, JS Global analyst Arhum Ghous said positivity prevailed in the market as the index rallied around 216 points to close at 34,719.

“Positivity in Friday’s session can be attributed to a rally in banking sector, as the sector continued its upward trajectory on the back of better than expected 1QFY16 results. Heavyweights such as HBL and MCB in the aforementioned sector gained to close on their respective upper circuit.

“OGDC (+0.98%), POL (+1.23%) and PPL (+0.34%) in the exploration and production sector gained to close in the green zone, as crude oil prices gained to trade above $46 per barrel. PSO (-1.79%) came under selling pressure after the oil marketing company declared a loss of Rs7.85 per share in its 3QFY16 result versus market expectation of Rs3.18 per share earnings.

“FFBL (+4.43%) gained on the back of material information disseminated in the market in which the company communicated that it has made investment in Noon Pakistan following approval in its Annual General Meeting held on March 8, 2016.

“Moving forward, we expect the market to continue its bullish momentum on the back of investor’s anticipation that Pakistan will make it to MSCI Emerging Markets Index.”

Trade volumes fell to 255 million shares compared with Thursday’s tally of 270 million shares.

Shares of 364 companies were traded on Friday. At the end of the day, 153 stocks closed higher, 197 declined while 14 remained unchanged. The value of shares traded during the day was Rs13.3 billion.

Bank of Punjab was the volume leader with 20.4 million shares, gaining Rs0.28 to finish at Rs9.21. It was followed by Sui North Gas with 15.6 million shares, gaining Rs0.43 to close at Rs33.44 and Pak Elektron with 15.5 million shares, losing Rs0.25 to close at Rs62.94.

Foreign institutional investors were net buyers of Rs141 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, April 30^th, 2016.

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