Market watch: Stocks advance on hopes of increased cash flow

Benchmark KSE-100 Index gains 531 points to settle at 41,790.16

KARACHI: The stock market gained significantly on Thursday in the wake of positive sentiment generated by waiving the requirement for equity mutual funds to maintain a minimum 5% of assets in cash as the regulatory change was expected to increase cash flow into the bourse.

The increased investor interest led to significant gains in notable index names across major sectors while some heavyweights suffered as sellers found an easy exit amid higher number of buyers.

At close, the benchmark KSE 100-share Index registered an increase of 531 points or 1.29% to settle at 41,790.16.

According to Elixir Securities, Pakistan equities surged to end the day with decent gains and the benchmark index reached close to 41,800 points.

Latest regulatory change applicable to equity mutual funds which waived the requirement for maintaining a minimum 5% of assets in cash turned sentiments positive as participants bet on possible fresh liquidity finding its way into equities.



Gains were led by index-heavy names such as Habib Bank (+2.7%), Engro Corporation (+3.5%), Pakistan Petroleum (PPL, +2.6%) and Oil and Gas Development Company (OGDC, +1.2%).

However, some notable names like Pakistan Oilfields (-1.1%), MCB Bank (-0.6%), United Bank (-0.6%) and Nishat Chunian (-1%) featured in the list of losers as sellers likely found an easy exit due to higher-than-average turnover.

Interest in second and third-tier names remained strong on retail buying, evident from steep volumes on the KSE All-share Index.

“We see the market to carry the momentum and inch upwards tomorrow (Friday), however, a sustained progress above 42,100 in the days ahead is vital for the index to terminate the ongoing bearish structure,” the report added.

JS Global analyst Maaz Mulla said bulls ruled the bourse, pushing the KSE-100 index up by 531 points to 41,790.

The market witnessed a recovery as value investors took the opportunity to buy stocks at attractive prices. Volumes improved 66% as 162 million shares were traded during the session.

Sui Northern Gas Pipelines (SNGPL, +0.59%) led the volumes with 10 million shares changing hands.

The exploration and production sector led the overall gains as global crude oil prices edged higher. PPL (+2.62%) and OGDC (+1.22%) were major gainers of the sector.

The auto sector continued its upward march for the third consecutive day where Honda Atlas Cars (+5%), Millat Tractors (+1.35%), Dewan Farooque Motors (+4.87%) and Pak-Suzuki Motor Company (+0.93%) gained to close positive.



Sui Southern Gas Company (+5%) closed at its upper circuit on the back of news that new connections for commercial and industrial users were available.

Steel companies also showed positive momentum where International Industries (+5%), Amreli Steels (+5%) and Aisha Steel Mills (+5.16%) closed at their respective upper circuits.

“The market is expected to recover in coming days; we recommend investors to trade in main board stocks and take long-term positions in them to benefit from undervalued stocks,” he added.

Overall, trading volumes rose to 161 million shares compared with Wednesday’s tally of 97 million.

Shares of 387 companies were traded. At the end of the day, 295 stocks closed higher, 78 declined while 14 remained unchanged. The value of shares traded during the day was Rs10.18 billion.

SNGPL was the volume leader with 10.48 million shares, gaining Rs0.71 to close at Rs121.43. It was followed by Aisha Steel Mills with 9.09 million shares, gaining Rs0.97 to close at Rs19.76 and Azgard Nine with 8.67 million shares, gaining Rs1 to close at Rs13.58.

Foreign institutional investors were net sellers of Rs100 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.