Market watch: KSE-100 advances on back of buying in cement sector

Benchmark index increases 175.47 points to settle at 32,254.32 points

KARACHI: The stock market rose on Tuesday following a topsy-turvy session a day earlier as buying interest in shares of cement companies helped the benchmark index march upwards.

After a rocky start, the KSE-100 index managed to post decent recovery and maintained the bullish momentum throughout the session.

The central bank governor's remarks about the current International Monetary Fund (IMF) loan programme being the last one helped boost investor confidence. Additionally, market participants reacted positively to the news pertaining to a hike in cement prices with effect from Wednesday.

At close, the benchmark KSE 100-share Index recorded an increase of 175.47 points, or 0.55%, to settle at 32,254.32 points.

JS Global analyst Danish Ladhani said equities closed on a positive note with the benchmark KSE-100 index gaining 175 points. "The bourse remained range bound throughout the session but saw brief positivity in later hours of trade," he remarked.

Cement stocks were the major gainers as Kohat Cement (+5%), DG Khan Cement (+5%), Cherat Cement (+5%) and Pioneer Cement (+5.2%) hit their upper price limits whereas Lucky Cement (+2.1%) was also a major gainer. Cement stocks gained ground on market talk that cement prices were likely to increase by Rs20 per bag.

The exploration and production (E&P) sector was the major laggard as Pakistan Oilfields (-1.4%), Pakistan Petroleum (-0.3%) and Oil and Gas Development Company (-0.2%) remained in the red as international crude prices fell plummeted.

Mixed sentiment was seen in the fertiliser sector where Engro (+0.6%) was the major gainer whereas Fauji Fertiliser Company (-0.6%) ended negative.

Unity Foods announced its FY19 results where the company reported earnings per share of Rs1.03 with cash payout of Rs0.10 per share.

"Moving ahead, we expect the market to remain choppy with expected selloff in oil and gas stocks following the decline in oil prices in the international market," Ladhani added.

"On a positive note, the government seems to be getting closer to the revenue collection target set by the IMF."

Topline Securities, in its report, said after Monday's lacklustre session, the KSE-100 index recorded a growth of 175 points or 0.55% to close at 32,254 as nearly all cement stocks remained positive in the range of 2-7% after the news pertaining to price hike.

"Despite a positive momentum, oil exploration companies remained under pressure as three out of four stocks ended in the red due to recent trend of low international oil prices," it said.

Investor participation in terms of volumes was encouraging as the turnover came in at 180 million shares - the highest in past 13 sessions.

K-Electric was the market leader, followed by Unity Foods and Fauji Cement, which cumulatively contributed 34 million shares to the total volume, the report added.

Overall, trading volumes increased to 180.7 million shares compared with Monday's tally of 166 million. The value of shares traded during the day was Rs4.99 billion.

Shares of 368 companies were traded. At the end of the day, 245 stocks closed higher, 112 declined and 11 remained unchanged.

K-Electric was the volume leader with 22.9 million shares, gaining Rs0.22 to close at Rs3.77. It was followed by Unity Foods with 19.4 million shares, gaining Rs0.35 to close at Rs9.18 and Fauji Cement XD with 14.7 million shares, gaining Rs0.99 to close at Rs14.39.

Foreign institutional investors were net buyers of Rs75.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.