Market watch: KSE-100 edges up with opening of some industries

Benchmark index increases 0.06% to settle at 31,242.19

KARACHI: The stock market maintained its bullish trend with a slight uptick on Wednesday as federal and provincial governments allowed various industries and sectors to resume business activities while extending the nationwide lockdown.

During intra-day trading, the bourse came under pressure due to a slump in global crude oil prices and concern over the International Monetary Fund (IMF) projection of a 1.5% decline in Pakistan’s GDP in FY20.

At close, the benchmark KSE-100 index recorded an increase of 19.45 points, or 0.06%, to settle at 31,242.19.

Arif Habib Limited, in its report, stated that the market opened on a positive note with a gain of 165 points, which primarily came in reaction to the opening of various industries and sectors permitted by the federal and provincial governments.

The index surged 572 points, barring stocks of exploration and production and oil and gas marketing companies, during the session despite a downward trend in international crude prices, it added.

As West Texas Intermediate (WTI) crude dropped more than 4.5% to an 18-year low of $19.20 per barrel, exploration and production and oil and gas marketing companies lost support maintained in trading earlier in the session.

The report pointed out that the fertiliser sector displayed a strong performance. In early trading, support came from index heavyweights such as Engro, Hubco, Lucky Cement, Dawood Hercules and Fauji Fertiliser Company.

Pakistan Investment Bond (PIB) yields dropped further, sparking optimism about a further cut in policy rate in the next monetary policy. PIBs of 10-year tenure traded at 8.65%.

The cement sector continued to lead trading volumes with 61.9 million shares changing hands, followed by oil and gas marketing companies (15.6 million) and chemical sector (14.2 million).

Stocks that contributed positively to the index included Dawood Hercules (+59 points), Lucky Cement (+18 points), Fauji Fertiliser Company (+14 points), Abbott Laboratories (+12 points) and Engro Polymer and Chemicals (+11 points).

Meanwhile, stocks that contributed negatively included OGDC (-37 points), Pakistan Petroleum Limited (-35 points), Pakistan Oilfields (-29 points), Nestle (-25 points) and Bank Alfalah (-16 points).

JS Global analyst Danish Ladhani said the market opened on a positive note, touching intra-day high and low of +572 and -41 points respectively. It closed at 31,242, up 19 points.

“On the economic front, the IMF expects negative 1.5% growth in Pakistan this year. Meanwhile, on the oil front, crude prices plummeted in the international market,” he added.

However, Engro (+0.3%), Fauji Fertilier Company (+1%), Lucky Cement (+1.5%), Bank AL Habib (+1.1%) and Dawood Hercules (+7.5%) cumulatively contributed to the positive close of the index.

Traded value stood at $45 million, up 55% and volumes came in at 185 million shares, up 42%.

“Going forward, we expect the market to remain negative and recommend investors to sell on strength,” he said.

Overall, trading volumes increased to 185.6 million shares compared with Tuesday’s tally of 130.4 million. The value of shares traded during the day was Rs7.5 billion.

Shares of 354 companies were traded. At the end of the day, 209 stocks closed higher, 131 declined and 14 remained unchanged.

Maple Leaf Cement was the volume leader with 22.5 million shares, gaining Rs0.03 to close at Rs23.08. It was followed by Hascol Petroleum with 10.9 million shares, losing Rs0.30 to close at Rs14.46 and Fauji Cement with 9.6 million shares, gaining Rs0.39 to close at Rs15.95.

Foreign institutional investors were net sellers of Rs505.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.