Market watch: KSE-100 advances ahead of mini-budget announcement

Benchmark index increases 201.63 points to settle at 39,614.18

KARACHI: The KSE-100 index remained in control of the bulls on Tuesday as the government continued to accommodate the business community's proposals in the upcoming mini-budget.

The start of drilling at Kekra-1 well invited investor interest in the energy stocks in general and Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) in particular.

In addition to that, seasonal demand coupled with expected relief in the mini-budget helped push fertiliser stocks up. The government also decided to abolish customs duty, additional customs duty and sales tax on cotton import in an effort to support the textile industry. Hence, investor sentiments remained positive as all signs pointed to a business-friendly mini-budget.

At the end of trading, the benchmark KSE 100-share Index recorded an increase of 201.63 points or 0.51% to settle at 39,614.18.



Elixir Securities' analyst Murtaza Jafar said equities extended their advance with the benchmark KSE-100 index settling at 39,614.

He said the market picked up momentum after trading sideways initially on the back of gains in PPL (+5%) and OGDC (+2.9%) over the start of Kekra-1 well's drilling in the offshore Indus G block.

"Both companies hold 25% stake each, along with global partners Exxon and Eni. The block offers potential for a sizeable hydrocarbon discovery, though earlier exploration attempts had failed to turn into economically viable flows," the analyst said.

"Moreover, the Economic Coordination Committee (ECC) approved the withdrawal of customs duty, additional customs duty and sales tax on cotton import from February 1 to June 30 to ensure sufficient supply of cotton to the industry."

That further improved sentiments in the textile sector with spinning players, particularly Nishat Chunian (+3.5%), being the key beneficiaries. Major volumes were witnessed in retail players including Pak Elektron (+1.2%), The Bank of Punjab (+0.8%), Lotte Chemical (-3.5%) and K-Electric (-0.9%).

The four shares together contributed 30.7 million shares or 38% of the total traded volume in the regular market.

"Going forward, we expect profit-taking to emerge near 40,000/300 levels," he added.



Overall, trading volumes increased to 122.24 million shares compared with Monday's tally of 115.33 million. The value of shares traded during the day was Rs7.01 billion.

Shares of 345 companies were traded. At the end of the day, 118 stocks closed higher, 203 declined and 24 remained unchanged.

Pak Elektron was the volume leader with 15.3 million shares, gaining Rs0.33 to close at Rs28.74. It was followed by The Bank of Punjab with 11.5 million shares, gaining Rs0.10 to close at Rs12.9 and Lotte Chemical with 11.4 million shares, losing Rs0.62 to close at Rs17.11.

Foreign institutional investors were net sellers of Rs119.34 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.