Market watch: Stocks turn positive on the back of retail investor interest

Benchmark KSE-100 Index gains 150.52 points to settle at 40,813.31

KARACHI: The KSE 100-share Index turned positive on Thursday in the wake of interest shown by retail and small investors, though institutional players stayed on the sidelines for most of the day in anticipation of positive triggers and attractive valuations.

Gains were led mainly by small and retail investor activity in mid-cap names while the most notable index names attracted little interest.

A major highlight of the day was Engro Corp's bounce back after shedding value for the past two sessions.

At close, the benchmark KSE 100-share Index registered an increase of 150.52 points or 0.37% to settle at 40,813.31.

Elixir Securities, in its report, stated Pakistan equities closed positive amid lacklustre trading with less than $50 million worth of shares changing hands on the KSE All-share Index.

"Stocks opened positive and traded in a narrow range as investors including institutions kept participation to the minimum in the absence of triggers," Elixir said.

Engro Corp (+1.3%), which received a hammering in the past two sessions losing around 7.6% following its downgrade in the MSCI index review, closed in the green zone and contributed the third highest points to the KSE-100 Index.

Overall, index names saw little activity while volume charts were primarily dominated by small and mid-caps on retail activity.

"(We) expect range-bound and volatile trading in the near term, but flows primarily from institutions can help resume the uptrend with chartists eyeing 42,000 as an immediate target level for the KSE-100 Index," the report added.

JS Global analyst Maaz Mulla said the market recorded another day of lacklustre activity with the KSE-100 Index crawling up 0.4% (150 points) to close at 40,813.

"Volumes remained subdued, reflecting little change from the previous day as 97 million shares changed hands. Most of the dull activity can be attributed to political uncertainty and lack of positive triggers," Mulla said.

Azgard Nine (+2.23%) continued to lead the volumes with trading in 13 million shares of the company.

Some of the major gainers of the day were Habib Bank (+1.39%), Pakistan Oilfields (POL, +1.55%), Engro (+1.28%), Pakistan Petroleum (PPL, +1.03%) and Maple Leaf Cement (+4.05%) that steered the market upwards by 109 points.

News reports suggested that the government was contemplating closing furnace oil-based power plants which could potentially dent profits of power and oil marketing companies.

Hubco (-0.04%), Kapco (-1.14%), Pakistan State Oil (-0.22%) and Nishat Power (-0.38%) closed in the red zone.

The exploration and produciton sector gained as crude oil prices recovered over growing expectations that OPEC would extend an ongoing production cut agreement. PPL (+1.03%), POL (+1.55%) and Oil and Gas Development Company (+0.50%) were major gainers of the sector.

Engro (+1.28%) recovered after experiencing heavy battering following its exclusion from the main MSCI Emerging Markets Index as value buyers jumped in to take advantage of the weak price levels.

"We recommend investors to stay cautious at current levels where any upside can be considered as an opportunity to book profits," Mulla said.

Overall, trading volumes rose to 96 million shares compared with Wednesday's tally of 90 million.

Shares of 356 companies were traded. At the end of the day, 166 stocks closed higher, 160 declined while 30 remained unchanged. The value of shares traded during the day was Rs5.01 billion.

Azgard Nine was the volume leader with 13.54 million shares, gaining Rs0.33 to close at Rs15.15. It was followed by TRG Pakistan with 7.67 million shares, gaining Rs0.49 to close at Rs35.04 and K-Electric with 5.77 million shares, losing Rs0.02 to close at Rs5.39.

Foreign institutional investors were net sellers of Rs161 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.