Market watch: Foreign investors continue to buy as KSE-100 moves past 45,000

Benchmark index rises 156.01 points to close at 45,063.21

KARACHI: Investors, especially foreign investors, continued to accumulate stocks on dips as the KSE-100 Index endured a fluctuating ride before eventually finishing positive for the seventh successive session on Wednesday.

The KSE-100 index advanced 585 points in just the first hour of trading, pushing the benchmark index past the 45,000 point barrier. However, profit-taking wiped all early-morning gains, dragging the index into the red to hit an intra-day low of 44,781.83. Late buying helped the market recover to end in the green zone.

At close, the KSE-100 Index ended with an increase of 156.01 points or 0.35% to finish at 45,063.21 points.

Elixir Securities' analyst Ali Raza said equities closed over 45,000 with pared gains in a volatile trading session.

"The market opened gap up in the morning driven mainly by sharp gains in cements as regulatory delays over expansions in Punjab alleviated pricing concerns in the short-term, while recent significant net inflows in the sector from foreign investors also boosted investor sentiment," Raza commented.



"After cements, other key sectors also followed suit, helping the KSE-100 Index test highs near 45,500. However, poor quarter-result announcement by Pakistan Oilfields (POL PA -5%) due to reversal of Tal block re-pricing incentive derailed the market momentum and also triggered sell off in other peer companies namely Pakistan Petroleum (PPL PA -3.2%) and Oil & Gas Development Company (OGDC PA -1.3%).

"We see the bullish momentum to continue with the KSE-100 Index revisiting previous highs as long as foreigners remain significant buyers in the coming sessions," he added.

JS Global analyst Maaz Mulla said bullish sentiment prevailed during the initial hours of the day, taking KSE-100 index up by 587 points. Though profit-taking brought the index down, it was followed by recovery as value investors took the opportunity to cherry-pick stocks.

Major index movers were LUCK (+4.90%), HBL (+2.17%), DGKC (+4.90%) and HUBC (+1.75%) as they cumulatively contributed 214 points to the index. On the flipside, POL (-5%), PPL (-3.23%), FFC (-2.39%) and OGDC (-1.32%) were the major laggards of the index, cumulatively contributing 201 points to the index.

"POL from the E&P sector declared its 1HFY18 results where the company posted an EPS of Rs20.13/share and a cash payout of Rs17.50/share, sharply below ours and street estimates. Moreover, OGDC (-1.32%) and PPL (-3.23%) from the said sector also declined to close negative," Mulla observed.



"A rally was witnessed in the cement sector as investors cherry picked, where LUCK (+4.90%), DGKC (+4.90%), FCCL (+4.76%) and CHCC (+3.75%) closed higher than their previous day close.

"Moving forward, we expect the market to continue the positive trend, however, we recommend investors to accumulate growth and value stocks on dips," he added.

Overall, trading volume increased to 339 million shares, compared with Tuesday's tally of 226 million.

Shares of 386 companies were traded. At the end of the day, 225 stocks closed higher, 142 declined while 19 remained unchanged. The value of shares traded during the day was Rs18.2 billion.

TRG Pakistan was the volume leader with 29 million shares, losing Rs0.05 to close at Rs34.65. It was followed by Fauji Cement with 18.7 million shares, gaining Rs1.37 to close at Rs30.16 and Sui South Gas with 15.2 million shares, gaining Rs0.43 to close at Rs36.44.

Foreign institutional investors were net buyers of Rs822.5 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.