Market watch: KSE-100 soars as investors pick stocks at attractive prices

Benchmark index increases 824.94 points to settle at 36,803.10

KARACHI: The KSE-100 index soared 825 points on Monday following positive conclusion of the International Monetary Fund (IMF)'s quarterly review of Pakistan's economy and the MSCI announcement that kept Pakistan Stock Exchange in the Emerging Market Index, which boosted the already strong investor sentiment.

On the other hand, many stocks dropped to attractive valuations in the past couple of days, prompting investors to resort to cherry-picking in the hope that the market would continue to advance in the days to come.

The index shot up as soon as trading began and the stock market maintained the uptrend till the end of the session. Index-heavy sectors including automobile, cement, fertiliser and exploration and production closed with lucrative gains.

At close, the benchmark KSE 100-share Index recorded an increase of 824.94 points, or 2.29%, to settle at 36,803.10.

"The market is up on IMF's satisfaction over Pakistan's economic trajectory and as Islamabad successfully averted a downgrade by the MSCI last week," JS Securities Head of Equity Sales Farhan Rizvi said while talking to The Express Tribune.

The benchmark index has gained over 2,800 points or over 8% in the past eight consecutive days including the Monday session. The third and most important factor for the rally was that share prices had dipped to attractive levels, the analyst added.

"Pakistan is the most discounted market these days with foreign and local institutional and individual investors taking fresh positions," he pointed out.

Arif Habib Limited, in its report, stated that the market surged again by a mammoth 840 points and closed near the day's high. "An imminent deal with the PML-N besides a possible reduction in the SBP policy rate gave confidence to investors and the market went up," it added.

Market volumes increased as well which reached 283 million shares, contributed mainly by the financial sector (50.4 million), followed by the cement sector (32.5 million) and technology sector (30.7 million).

Among individual stocks, The Bank of Punjab registered trading volume of 35.9 million shares, followed by WorldCall Telecom (14.5 million) and Maple Leaf Cement (11.7 million).

JS Global analyst Maaz Mulla said the Pakistan Stock Exchange kicked off trading on a positive note, hitting the day's high of +839 points and closing at 36,803, up 825 points.

"Significant buying came following an IMF staff mission concluded its visit to Pakistan with all praise for the authorities for meeting first-quarter targets under the $6-billion Extended Fund Facility, which paved the way for disbursement of $450 million early next month," he said.

Bulls continued to accumulate stocks across the board, where activity in all key sectors such as cement, banks and exploration and production was seen.

Local and foreign investors aggressively participated in the market.

Overall, trading volumes increased to 282.9 million shares compared with Friday's tally of 210.6 million. The value of shares traded during the day was Rs9.1 billion.

Shares of 380 companies were traded. At the end of the day, 304 stocks closed higher, 59 declined and 17 remained unchanged.

The Bank of Punjab was the volume leader with 35.9 million shares, gaining Rs0.46 to close at Rs10.41. It was followed by WorldCall Telecom with 14.5 million shares, gaining Rs0.02 to close at Rs1.71 and Maple Leaf Cement XD XR with 11.8 million shares, gaining Rs0.98 to close at Rs19.55.

Foreign institutional investors were net buyers of Rs219.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.