Market watch: Investors cheer cut in PIB yields as KSE-100 rises

Benchmark index gains 442.27 points to settle at 34,203.68

KARACHI: In a U-turn, the KSE-100 index turned bullish and gained 442 points on Thursday as investors welcomed the news of decrease in Pakistan Investment Bond (PIB) yields in an auction held a day ago.

Yields in the State Bank of Pakistan's PIB auction fell, on average, over 100 basis points compared to the yields in auction held last week, which acted as a positive trigger and bolstered investor sentiment.

On the other hand, growing political noise because of the Azadi march held by opposition parties failed to impact the bourse throughout the day.

The index shot up as soon as trading began and rose past the 34,000-point mark. The uptrend continued steadily throughout the day. A few dips were seen which were corrected timely.

At close, the benchmark KSE 100-share Index recorded an increase of 442.27 points, or 1.31%, to settle at 34,203.68.

Arif Habib Limited, in its report, stated that despite the political uncertainty, because of the Azadi march organised by Jamiat Ulema-e-Islam-Fazl (JUI-F) and supported by other opposition parties, the market took positive cue from Wednesday's PIB auction.

"Yields dropped further, especially of the 10-year bond, which cemented the view of a rate cut in the upcoming monetary policy," it said.

"Announcement of the next PIB auction before the next monetary policy also helped professional money managers take a view that yields will drop further or at least remain static, which becomes the reason for the shifting of funds deployed in fixed income back to equities."

Buying activity was seen across the board, especially in exploration and production, cement and banking sectors, which kept stock prices at high levels.

The index moved north and touched a high of 545 points, closing the session at +442 points.

The technology sector realised trading volume of 31.4 million shares, followed by the cement sector (25.1 million) and banks (20.2 million).

Among individual stocks, WorldCall Telecom again led the volumes with trading in 24.2 million shares, followed by The Bank of Punjab (9.1 million) and Maple Leaf Cement (8.5 million), the report said.

JS Global analyst Danish Ladhani said equities closed on a positive note with the benchmark KSE-100 index gaining 442 points and closing at 34,204, up 1.3%.

"The market remained positive, however, we expect it to remain choppy as the opposition parties' march reaches close to the capital city Islamabad," he said.

Mixed sentiment was witnessed in the fertiliser sector where Engro (+2.7%) remained in the positive zone whereas Fauji Fertiliser (-0.8%) lost ground.

In the financial sector, HBL (+0.7%), MCB Bank (+3.4%) and UBL (+1.9%) remained in the green.

In the exploration and production sector, Oil and Gas Development Company (+0.7%), Pakistan Petroleum (+2.2%) and Pakistan Oilfields (+1%) remained in the green zone despite mixed oil prices in the international market amid a surge in US stockpiles.

Traded value stood at $44 million, up 37% and volumes came in at 184 million shares, up 42%, the analyst said.

Overall, trading volumes increased to 184 million shares compared with Wednesday's tally of 130 million. The value of shares traded during the day was Rs6.9 billion.

Shares of 355 companies were traded. At the end of the day, 235 stocks closed higher, 101 declined and 19 remained unchanged.

WorldCall Telecom was the volume leader with 24.3 million shares, gaining Rs0.02 to close at Rs1.22. It was followed by The Bank of Punjab with 9.1 million shares, gaining Rs0.21 to close at Rs10.01 and Maple Leaf Cement XD XR with 8.5 million shares, gaining Re1 to close at Rs16.22.

Foreign institutional investors were net sellers of Rs317.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.