Market watch: KSE-100 rises to 11-month high

Benchmark index increases 402.42 points to settle at 40,916.59

KARACHI: Bulls returned to the bourse on Friday and lifted the KSE-100 index above the 41,000-point mark for some time as it traded at 11-month high levels, supported by buying interest in stocks of oil companies.

The index was last seen trading above 41,000 points in February 2019. So far, the market has regained over 11,000 points after hitting a five-year low at 28,671 points in August 2019.

The exploration and production sector saw aggressive buying owing to increase in international crude oil prices. Similarly, oil and gas marketing firms also saw multiple stocks hit their upper cap.

The index shot up as soon as trading began in the morning and maintained the uptrend till the end of the first session, which took the KSE-100 above 41,000 points. The first session ended with a gain of over 500 points.

In the second session, the strong investor sentiment faded away as market players resorted to stock selling, which dragged the market down and erased some of the gains.

At close, the benchmark KSE 100-share Index recorded an increase of 402.42 points, or 0.99%, to settle at 40,916.59.

"The oil sector led the rally from the front," JS Global Head of Equity Sales Farhan Rizvi said while talking to The Express Tribune. "Oil stocks sparked renewed and strong buying after Russian firms were invited to acquire stakes in Pakistan's state-owned oil and gas exploration firms."

Foreign investors expressed interest particularly in Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL).

"PSX continues to be one of the best performing/ recovered markets in the world," said Alpha Beta Core CEO Khurram Schehzad.

Rizvi said the market outlook remained positive considering back-to-back good news on the economic front. The latest good news was that the country's foreign currency reserves had recovered to an eight-month high at $9.23 billion, he said.

Besides, investors were making extended buying on cash instead of borrowed money, indicating that they were making long-term investment in the stock market.

"The market may hit 43,000 and (then) 45,000 points in the next three to four months," said Rizvi.

JS Global analyst Danish Ladhani said positivity came during the session partly on the back of news that Pakistan had offered Russia to participate in the divestment of government's shareholding in the country's largest state-run oil and gas explorers - OGDC and PPL - and become a strategic partner by acquiring shares.

"Average daily traded value stood at $75 million, up 39% and volumes came in at 270 million shares, up 19%. Major contribution to the total market volume came from Unity Foods (+3.1%), The Bank of Punjab (+1.3%) and Fauji Foods (+1.9%)," the analyst said.

Overall, trading volumes increased to 270.7 million shares compared with Thursday's tally of 227 million. The value of shares traded during the day was Rs11.7 billion.

Shares of 363 companies were traded. At the end of the day, 227 stocks closed higher, 116 declined and 20 remained unchanged.

Unity Foods was the volume leader with 28.3 million shares, gaining Rs0.46 to close at Rs15.36. It was followed by The Bank of Punjab with 14.8 million shares, gaining Rs0.15 to close at Rs11.94 and Fauji Foods with 13.6 million shares, gaining Rs0.3 to close at Rs15.86.

Foreign institutional investors were net sellers of Rs503.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.