Market watch: Stocks bounce back, KSE-100 climbs 374 points

Benchmark KSE 100-share Index rises 0.76%

Our Correspondent February 16, 2017

KARACHI: Attractive valuations and results announcements kept investors interested as the benchmark KSE-100 Index climbed 374.15 points on Thursday, a day after it fell over 550 points due to panic selling.

At close on Thursday, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index finished with a rise 0.76% or 374.15 points to end at 49,588.30.

Topline Securities analyst Hammad Aman said the index recovered from Wednesday’s fall based on lucrative valuation, mainly led by banks as HBL, UBL and MCB contributed 106 points to the gain.

DG Khan Cement announced its 2QFY17 earnings per share (EPS) of Rs6.0/share which was above market consensus, said Aman.

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Millat Tractors (MTL) closed at its upper limit of 5% as it announced impressive earnings of Rs39.4/share. In a separate notice, MTL announced that it has decided to explore the possibility of becoming part of a joint venture consortium which is setting up a green field project for assembly and sales of Hyundai Motor Company, said Aman.

Elixir Securities, in its report, stated Pakistan equities snapped a three-day losing streak, helped primarily by gains in notable blue chips.

“Start to the day was on a positive note as pharmas led morning gains on news that companies have ended the strike and reached an agreement with provincial government over recent Drug Act amendments,” said analyst Ali Raza.

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“The wider market, however, failed to follow the lead and struggled for direction in early trading amid dull activity.

“Near mid-day, market witnessed a rebound that led to benchmark Index entering on a path of steady incline as savvy investors cherry picked blue-chip names especially the ones that are slated for inclusion in MSCI EM,” said Raza.

“On the results front, earnings and payout of Maple Leaf Cement (MLCF -0.3%) came slightly better than market expectations, while that of DG Khan Cement's (DGKC PA -1%) came broadly in line; both stocks however witnessed profit-taking and closed in red.

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“Notably, Millat Tractors (MTL PA +5%) cheered investors after it not only announced stellar 1H earnings but also disclosed intentions for joining the recent JV between Hyundai and Nishat Mills (NML PA +0.1%).

“Despite gains, the wider market is likely to see pressure and volatility with 50,000 level providing strong resistance.”

So unless institutional activity picks up strongly or earnings announcements of major stocks surprise participants in the coming days, we expect market to remain range bound, Raza added.

Trading volumes fell to 263 million shares compared with Wednesday’s tally of 417 million.

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Shares of 415 companies were traded. At the end of the day, 260 stocks closed higher, 135 declined while 20 remained unchanged. The value of shares traded during the day was Rs14.2 billion.

Aisha Steel Limited was the volume leader with 21.7 million shares, gaining Rs1.30 to close at Rs27.38. It was followed by Dost Steels Limited with 21.4 million shares, gaining Rs0.89 to close at Rs15.94 and TRG Pakistan Limited with 13.7 million shares, gaining Rs1.19 to close at Rs58.07.

Foreign institutional investors were net buyers of Rs372 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited


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