Market watch: Stocks rise as Pakistan remains in MSCI EM index

KSE-100 index gains 90.02 points to settle at 33,693.04

KARACHI: Bulls maintained their control over the Pakistan Stock Exchange (PSX) on Wednesday as the benchmark index advanced 90 points on the back of improved sentiment.

The KSE-100 index got off to a positive start, however, it kept oscillating between red and green territories throughout the session and finally ended the day in the green. It marked the third successive session in the positive zone despite growing number of coronavirus cases in the country.

Expectations of policy rate cut in the monetary policy announcement on May 15, coupled with Morgan Stanley Capital International’s (MSCI) decision to keep Pakistan’s weight unchanged in the Emerging Markets Index and blue-chip stocks Oil and Gas Development Company (OGDC), MCB Bank and Habib Bank Limited (HBL) in the Standard Index, helped propel the index forward.

At close, the benchmark KSE-100 index recorded an increase of 90.02 points, or 0.27%, to settle at 33,693.04.

Arif Habib Limited, in its report, stated that the market opened on a positive note with +125 points and maintained the momentum of previous day’s trading, gaining 200 points before facing resistance.

“The MSCI rebalancing did not result in Habib Bank Limited’s ouster, which was the main reason for selling pressure on the bank’s stocks in the past sessions,” it said. “HBL notched up price gains but still stayed within limits.”

Among oil and gas marketing companies, Sui Northern Gas Pipelines Limited (SNGPL) came under selling pressure due to its exclusion from the MSCI Emerging Markets Index, the report said.

Meanwhile, among pharmaceutical stocks, Ferozsons Laboratories consistently hit its upper circuit and buying activity was also noted in The Searl Company.

The cement sector led the volumes with trading in 69.1 million shares, followed by technology firms (32.1 million) and oil and gas marketing companies (16.1 million).

Stocks that contributed positively to the index included HBL (+37 points), Pakistan Petroleum Limited (PPL, +29 points), Mari Petroleum (+18 points), TRG Pakistan (+18 points) and MCB Bank (+15 points).

Stocks that contributed negatively were SNGPL (-27 points), Hubco (-22 points), Engro (-19 points), Dawood Hercules (-16 points) and EFU General Insurance (-11 points).

JS Global analyst Maaz Mulla said bulls dominated the KSE-100 index, which touched a high of +200 points and closed at 33,693 (+90 points).

“In the exploration and production sector, PPL (+2%) and Mari Petroleum (+2.4%) went up as both the stocks were added to the small-cap MSCI index,” he said.

Moreover, investors’ interest was witnessed in the banking sector where HBL (+2.2%), UBL (+0.3%), MCB Bank (+1%), Bank Alfalah (+0.8%) and The Bank of Punjab (+2.7%) closed in the green zone.

Major movers of the day were HBL (+2.2%), PPL (+2%), Mari Petroleum (+2.4%), PSO (+1.6%), MCB (+1%), SNGPL (-6.9%), Hubco (-1.2%) and UBL (+0.3%) that drove the market in both directions.

“Moving forward, we expect the market to trade sideways as the consolidation phase continues. However, investors should take the opportunity to accumulate stocks as the medium to long-term trend remains bullish,” the analyst said.

Overall, trading volumes decreased to 219.2 million shares compared with Tuesday’s tally of 224.5 million. The value of shares traded during the day was Rs8.2 billion.

Shares of 346 companies were traded. At the end of the day, 152 stocks closed higher, 174 declined and 20 remained unchanged.

Maple Leaf Cement was the volume leader with 23.2 million shares, losing Rs0.27 to close at Rs27.14. It was followed by TRG Pakistan with 16.3 million shares, gaining Rs1.57 to close at Rs22.59 and Dewan Cement with 16.2 million shares, gaining Rs0.80 to close at Rs9.04.

Foreign institutional investors were net sellers of Rs653.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.