Market watch: Bulls maintain control as index surges past 30,000 points

Benchmark KSE-100 index advances 856.80 points to settle at 30,419.22

Salman Siddiqui August 20, 2019
Benchmark KSE-100 index advances 856.80 points to settle at 30,419.22. PHOTO: AFP

KARACHI: The uptrend at the Pakistan stock market continued for the second successive session on Tuesday as the benchmark index surged over 900 points in intra-day trading.

In the morning, the KSE-100 index opened on a positive note and maintained the momentum for the entire session, surpassing the 30,000-point mark.

The rebound from the extensive losses recorded in the past week came on the back of efforts made to de-escalate tensions between Pakistan and India. Following the relatively improved situation, the investors jumped to buy stocks as share prices had hit historic lows.

"We think the market (had) overreacted to the bad headlines on the economic and political fronts," Topline Securities said in a report.

Prior to Monday's smart gain of around 800 points, the market had dropped over 3,000 points (10%) in the past eight consecutive sessions to a five-year low below 29,000 points by Friday last week.

The brokerage house noted that the market had dropped 46% - 64% in US dollar terms - from its May 2017 peak of nearly 53,000 points.

"Such index numbers had not been seen since the infamous market closure in 2008," it said. "Any positive news on the political (settlement with India or opposition parties) or economic front (Eurobond float, carry trades) will help in a 5-10% market recovery in the short run."

Earlier, repeated hikes in the key interest rate and rupee depreciation were among the factors that played havoc with the stock market.

The brokerage house believed that the interest rate cycle was now close to its peak. It may start coming down in the next 12 to 18 months, it said. Moreover, with falling imports, Pakistan's currency may not show major fluctuations going forward.

At close, the benchmark KSE 100-share Index recorded an increase of 856.80 points, or 2.90%, to settle at 30,419.22 points.

JS Global analyst Maaz Mulla said equities further escalated with the benchmark KSE-100 index gaining 857 points and closing at 30,419, up 2.9%.

Market participation was seen in financial, exploration and production, and fertiliser sectors. Among financial stocks, HBL (+5%), MCB Bank (+5%), UBL (+5%) and Bank AL Habib (+5%) closed at their upper circuits.

Allied Bank (+0.5%) announced 1HCY19 consolidated earnings per share (EPS) of Rs5.45 vs Rs6.33 in the same period of last year with dividend per share of Rs2.

In the energy sector, Oil and Gas Development Company (+2.8%), Pakistan Petroleum (+3.5%) and Pakistan Oilfields (+4.7%) remained in the positive territory.

Engro (+5%) in the fertiliser sector touched its upper circuit as the company announced 1HCY19 consolidated EPS of Rs11.93 vs Rs10.57 in the same period of last year with dividend per share of Rs8.

"Moving ahead, we expect the market to exhibit volatility in coming sessions due to overall ambiguity over Pakistan-India confrontation," the analyst said.

Overall, trading volumes increased to 142.6 million shares compared with Monday's tally of 102.5 million. The value of shares traded during the day was Rs5.6 billion.

Shares of 373 companies were traded. At the end of the day, 268 stocks closed higher, 86 declined and 19 remained unchanged.

The Bank of Punjab was the volume leader with 10.4 million shares, gaining Rs0.64 to close at Rs7.93. It was followed by TRG Pakistan with 8.99 million shares, losing Rs0.02 to close at Rs13.20 and Maple Leaf Cement with 7.04 million shares, losing Rs0.05 to close at Rs18.46.

Foreign institutional investors were net sellers of Rs203 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.


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