Market watch: KSE-100 gains on back of interest in banking, cement stocks

Benchmark index increases 370.58 points to settle at 40,641.10

KARACHI: Bulls maintained control over the stock market on Thursday as investors were upbeat following another positive report from Moody's Investors Service, which upgraded the outlook on five Pakistani banks.

The KSE-100 index shot up from the moment trading began as buying interest remained strong, particularly in banking and cement stocks. News regarding increase in cement sales also aided investor confidence and further fuelled the positive momentum.

Although the index retreated from its intra-day high of 40,809.31, it still finished the day in the positive zone. Despite a nine-year high inflation reading of 12.7%, the news did not have any major impact on the market.

At close, the benchmark KSE 100-share Index recorded an increase of 370.58 points, or 0.92%, to settle at 40,641.10.

JS Global analyst Danish Ladhani said equities closed on a positive note with the benchmark KSE-100 index gaining 371 points and closing at 40,641.

"Once again value buying was witnessed at the bourse. Exploration and production, financial and cement stocks were major gainers of the day among which Pakistan Petroleum Limited (+3%), Pakistan Oilfields (+2.2%), HBL (+1.7%), UBL (+0.3%), Lucky Cement (+1.8%) and DG Khan Cement (+4%) contributed to the positive close," he said.

Moreover, activity was seen in banks as Moody's changed the outlook on five Pakistani banks to stable from negative. Furthermore, cement sales in November 2019 rose 11% year-on-year to 4.35 million tons.

"Moving ahead, we expect the market to remain positive," Ladhani added.

Topline Securities, in its report, stated that Moody's affirmed B3 long-term local currency deposit ratings of five major commercial banks which included ABL, MCB, NBP, HBL and UBL. This sparked positivity in the market, which saw traded value breach the Rs20-billion mark - the highest for CY19 to date, it added.

"Oil and Gas Development Company, Pakistan Petroleum and Pakistan Oilfields closed positive in the range of 1-3% on the back of higher international crude prices. Main contribution to the index came from Pakistan Petroleum (+53 points), followed by HBL (+42 points), PSO (+28 points) and Pakistan Oilfields (+26 points)."

Overall, trading volumes increased to 507.9 million shares compared with Wednesday's tally of 393.2 million. The value of shares traded during the day was Rs20.1 billion.

Shares of 404 companies were traded. At the end of the day, 226 stocks closed higher, 159 declined and 19 remained unchanged.

Unity Foods was the volume leader with 35.2 million shares, gaining Rs0.08 to close at Rs13.14. It was followed by Fauji Cement with 34.1 million shares, gaining Rs0.82 to close at Rs17.07 and Maple Leaf Cement with 20.5 million shares, losing Rs0.20 to close at Rs24.12.

Foreign institutional investors were net buyers of Rs225.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.