Market watch: Stocks surge over 900 points in first session of year

Benchmark index increases 2.51% to settle at 37,995.77

Our Correspondent January 01, 2019
Benchmark index increases 2.51% to settle at 37,995.77. PHOTO: FILE

KARACHI: The first day of the year set the tone for the stock market on Tuesday as it surged over 900 points in a handsome rally.

Bullish sentiments dominated the market as soon as trading began and the index stayed in positive territory for the entire day. Stocks staged a sharp recovery amid speculation after China’s commitment to lend $2 billion to support Pakistan’s sliding rupee as well as reduction in petroleum product prices by the government.

At the end of trading, the benchmark KSE 100-share Index recorded an increase of 929.10 points or 2.51% to settle at 37,995.77.

JS Global analyst Maaz Mulla said the stock market welcomed the new year with a bull run where the KSE-100 index hit an intra-day high of 980 points. He said trading volumes, however, remained subdued and only 97 million shares changed hands during the day.

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“Pak Elektron (+4.7%) led the volumes with trading in nearly 12 million shares. On the news front, Prime Minister Imran Khan said 2019 would be the beginning of Pakistan’s golden era and vowed to continue his mission against the ills plaguing the country,” he added.

Moreover, China pledged to lend at least $2 billion to Pakistan to shore up its foreign exchange reserves and prevent further depreciation of the rupee against the dollar.

Among major stocks, Engro (+5%), Oil and Gas Development Company (OGDC, +4.7%), Pakistan Petroleum Limited (PPL, +3.6%), United Bank Limited (UBL, +5%), Lucky Cement (+4.7%), Pakistan Oilfields (+4.8%) and Habib Bank (+2.3%) cumulatively contributed 457 points to the index.

Commercial banks moved up as big banks boosted the index by 140 points. UBL (+5%), Habib Bank (+2.3%), Bank Alfalah (+5%) and MCB Bank (+1.3%) were major movers of the sector.

Pakistan Oilfields (+4.8%), PPL (+3.6%) and OGDC (+4.7%) from the exploration and production sector moved higher on the back of increase in crude oil prices in the international market.

“Going forward, we expect the market to depict a similar trend, therefore, recommend investors to see any downside as an opportunity to buy in cement and banking sectors,” the analyst added.

According to Arif Habib Limited, the first day of the calendar year was greeted by a nearly 1,000-point increase in the benchmark index. “The market went up by 980 points in intra-day trading, capping many blue chips on the way up including UBL, Lucky Cement, OGDC, etc,” it said in its report.

At the start, the market displayed signs of nervousness but as the day progressed the index kept on rising and prices started climbing with little volumes, it added.

“The insurance sector, which had been a net seller in the past couple of sessions, was found absent which gave confidence to the investors to take confident bets. The news of China lending another $2 billion to Pakistan for reserves management also lifted the market.”

Sectors contributing to the index included exploration and production (230 points), banks (214 points), fertiliser (146 points), cement (115 points) and oil and gas marketing companies (68 points).

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Stocks that contributed significantly to the volumes were Pak Elektron, TRG Pakistan, The Bank of Punjab, K-Electric and Lotte Chemical, which accounted for 34% of the total volumes.

Moreover, stocks that contributed positively included Engro (90 points), OGDC (89 points), PPL (69 points), UBL (64 points) and Lucky Cement (60 points). Negative contribution came from Meezan Bank (19 points), Millat Tractors (19 points), Colgate Palmolive (10 points), Abbott Laboratories (9 points) and Shell Pakistan (7 points).

Overall, trading volumes decreased to 96.66 million shares compared with Monday’s tally of 226.06 million. The value of shares traded during the day was Rs4.3 billion.

Shares of 339 companies were traded. At the end of the day, 233 stocks closed higher, 88 declined and 18 remained unchanged.

Pak Elektron was the volume leader with 11.99 million shares, gaining Rs1.16 to close at Rs26.06. It was followed by TRG Pakistan with 6.3 million shares, gaining Rs1.11 to close at Rs23.41 and The Bank of Punjab with 5.89 million shares, gaining Rs0.46 to close at Rs12.43.

Foreign institutional investors were net sellers of Rs64.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.


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