Market watch: KSE-100 continues ascent, gains 570 points

Benchmark index advances 1.41% to settle at 40,862.59

KARACHI:

Bears and bulls tried to wrestle control of the Pakistan Stock Exchange on Wednesday and the latter managed to dominate the proceedings.

Investors’ expectation of an increase in the Consumer Price Index, scheduled to be announced next week, and ahead of monetary policy announcement next month impacted activity at the bourse.

The benchmark KSE-100 index oscillated between red and green zones as companies in certain sectors announced financial results for the quarter and half year ended June 30, 2020. Bullish trend was supported by oil and energy stocks amid surging global crude oil prices.

At close, the benchmark KSE-100 index recorded an increase of 569.77 points, or 1.41%, to settle at 40,862.59 points.

Arif Habib Limited, in its report, stated that the market continued its ascent from the previous day’s level and added a total of 602 points during the session.

“The banking sector performed well, which pushed the index to higher levels,” it said, adding “expectation of a higher Consumer Price Index and the monetary policy decision in September are major reasons for brisk activity in the banking sector.”

Exploration and production sector stocks posted gains and lifted the benchmark index. The refinery sector posted the highest trading volumes of 65.9 million shares, followed by cement firms (62.2 million) and oil and gas marketing companies (53.5 million).

Individually, stocks that contributed positively to the index included HBL (+124 points), MCB (+61 points), UBL (+48 points), Pakistan Oilfields (+41 points) and Engro (+37 points).

Stocks that contributed negatively were Bank Alfalah (-35 points), Nestle (-11 points), Allied Bank (-8 points), Philip Morris Pakistan (-6 points) and Pakistan Services (-5 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed in the positive territory, hitting a high of +602 points. It ended the day at 40,862, up 570 points.

“The market again moved upwards where financial, fertiliser and exploration and production sectors were the major movers,” he said.

In the financial sector, Bank Alfalah (-5.9%) announced 1HCY20 consolidated earnings per share (EPS) of Rs3.25 versus Rs3.56 in the same period of previous year with no cash payout.

Among refineries, National Refinery (+1%) announced loss per share of Rs50.82 for FY20 versus loss per share of Rs108.70 last year whereas Attock Refinery (-2.6%) reported FY20 loss per share of Rs43.95 versus loss per share of Rs80.78 in the previous year with no cash payout, Ladhani added.

Pakistan Oilfields (+3.3%) was the major performer in the exploration and production sector as the company announced consolidated EPS of Rs51.23 versus Rs46.77 last year with cash payout of Rs30 per share.

Mixed sentiment was seen in the cement sector where Cherat Cement (+0.1%) reported loss per share of Rs9.74 for FY20 versus EPS of Rs9.07 in the previous year with no cash payout.

In the fertiliser sector, Fatima Fertiliser (+4.3%) reported 1HCY20 EPS of Rs3.41 versus Rs3.36 in the same period of last year with no cash payout.

Traded value stood at $128 million, up 6% and volumes came in at 508 million shares, down 5%.

“Going forward, we expect the market to trade sideways in the absence of any immediate triggers and the rollover week. We recommend investors to sell on strength,” the analyst said.

Overall, trading volumes dropped to 508 million shares compared with Tuesday’s tally of 535.1 million. The value of shares traded during the day was Rs21.5 billion.

Shares of 416 companies were traded. At the end of the day, 247 stocks closed higher, 150 declined and 19 remained unchanged.

Pakistan Refinery was the volume leader with 49 million shares, gaining Rs0.28 to close at Rs18.34. It was followed by Hascol Petroleum with 36.1 million shares, losing Rs0.17 to close at Rs16.79 and Kot Addu with 18.5 million shares, gaining Rs1.83 to close at Rs29.89.

Foreign institutional investors were net buyers of Rs171.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.