Market watch: Index gains 538 points as bullish sentiment dominates

Benchmark KSE-100 index finishes at 37,517.75.

KARACHI: Pakistan equities rallied strongly and ended the day with hefty gains as the benchmark-100 index ended at a record close, pushing beyond the 37,500-point mark.

After days of subdued sentiment, which included a selling spree last Friday, investors took strong positions ahead of the MSCI announcement.

At close, the Pakistan Stock Exchange’s benchmark KSE 100-share index recorded a rise of 1.45% or 537.79 points to end at 37,517.75.



Elixir Securities, in its report, said the day kicked off on a strong note as investors brushed aside concerns of a possible delay in status upgrade of Pakistan to MSCI EM Index, and built aggressive positions in stocks that are top contender for inclusion.

“Nearly one-fifth of contribution in day’s gain came from index heavy Habib Bank Limited (HBL PA +4.6%) alone, that also briefly hit the upper price limit intra-day and ended in Top 10 on the volumes board.”

“Other major contributions came from Lucky Cements (LUCK PA +3.9%), Hub Power Company (HUBC PA +2.6%), Muslim Commercial Bank (MCB PA +2.2%), United Bank Limited (UBL PA +2.3%), Fauji Fertilizers Company (FFC PA +2.3%) and Oil & Gas Development Company Limited (OGDC PA +1.8%) that cumulatively added over 240 points to benchmark index,” added the report.

“Investors keenly await MSCI review, where a decision to upgrade status of Pakistan from Frontier Markets to Emerging Markets would likely induce a fresh bull run,” remarked Elixir Securities analyst Ali Raza

Meanwhile, JS Global analyst Arhum Ghous said the nine proposed stocks in the large capitalisation and mid-tier category of MSCI Emerging Market Index led the rally, where HBL (4.6%) and LUCK (3.9%) both gained to close in the green zone.

“Honda Atlas Cars (HCAR 3.3%) and Indus Motors (INDU 0.4%) gained to close in the green zone on the back of one-time tax imposed on imported vehicles above 1300cc engine capacity by the Punjab government in its FY17 budget announcement on Monday.



“Investor interest was seen in the fertiliser sector as the Punjab government in its budget announcement on Monday also allocated Rs100 billion under the ‘Khadim-e-Punjab Kissan package’ to address the issues of farmer community and food security over the course of two years,” said Ghous.

“Major gainers of the aforementioned sector were Fauji Fertilizer Company (FFC 2.3%) and ENGRO (1.1%).

“Moving forward we expect the market to have a positive correlation with MSCI reclassification, where the decision will predominantly decide the direction of the market movement,” concluded Ghous.

Trade volumes rose to 143 million shares compared with Monday’s tally of 139 million.

Shares of 331 companies were traded. At the end of the day, 202 stocks closed higher, 109 declined while 20 remained unchanged. The value of shares traded during the day was Rs9.5 billion.

K-Electric was the volume leader with 27.3 million shares, gaining Rs0.11 to finish at Rs8.12. It was followed by Pakistan International Bulk Terminal with 10.7 million shares, gaining Rs0.28 to close at Rs32.50 and Engro Fertilizers Limited with 8.8 million shares, gaining Rs0.55 to close at Rs67.48.

Foreign institutional investors were net sellers of Rs50.4 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, June 15^th, 2016.

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