Bulls maintained their grip on the Pakistan stock market for the second consecutive day as the benchmark KSE-100 index powered past the 39,500-point mark with a surge of over 700 points on Wednesday.
Investors’ expectations about quarterly corporate results and a strengthening rupee against the US dollar impacted activity at the bourse.
The KSE-100 index oscillated between red and green zones as companies in certain sectors announced financial results for the year ended June 30, 2020. Bullish trend was supported by the cement sector because of upbeat data that showed cement sales rose to an all-time high in September.
However, the banking sector bore the brunt of a notification issued by the State Bank of Pakistan, which referred to the decision taken by the Finance Division to close bank accounts of federal ministries, divisions, etc with commercial banks.
At close, the benchmark KSE-100 index recorded an increase of 722.48 points, or 1.85%, to settle at 39,849.96 points.
Arif Habib Limited, in its report, stated that the market finally made a positive move. Though investors were jittery in the beginning, the market turned strong by midday, closing the day up by 722 points, it said.
Buying activity was noted across the board but had a major impact on the cement sector, especially DG Khan Cement and Lucky Cement, it said.
The central bank’s notification to transfer federal government-related bank deposits in part from the commercial banking system to the State Bank put selling pressure on The Bank of Punjab and National Bank of Pakistan.
A number of mid-cap stocks (usually recording high trading volumes) like Unity Foods, TRG Pakistan and Hascol Petroleum traded at or near their upper circuits in the later part of the session, the report added.
The rebound in the KSE-100 index could also be attributed to the adjustment/ settlement of capital gains tax (CGT), lately demanded by the National Clearing Company of Pakistan Limited (NCCPL) from investors which had a negative impact on investor sentiment.
Sectors contributing to the performance included cement (+133 points), pharma (+74 points), oil and gas marketing (+66 points), technology (+65 points) and banking (+58 points).
Individually, stocks that contributed positively to the index included Lucky Cement (+46 points), Searle Company (+39 points), TRG Pakistan (+32 points), Engro Corporation (+32 points) and MCB (+27 points).
Stocks that contributed negatively were NBP (-16 points), Philip Morris (-7 points), HBL Growth Fund (-4 points), Fauji Fertiliser (-4 points) and Habib Metropolitan Bank (-3 points).
JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed in positive territory after touching a high of +792 points. It ended the day at 39,850, up 722 points.
“The market remained positive throughout the trading session as value buying was made by financial institutions,” he stated.
Pioneer Cement (+4.3%), in its material information, said its newly installed waste heat recovery plant had started operating from Wednesday.
“Moreover, the Finance Division directed all the federal ministries, divisions, related departments and subordinate offices to close their bank accounts with commercial banks/ financial institutions and transfer balance funds to the federal government's central account No I with the SBP,” he said.
“NBP (-3.5%), JS Bank Limited (-0.4%), The Bank of Punjab (-1%) and ABL (-0.1%) closed in the negative territory.”
Traded value increased 10% to $82 million and volumes came in at 431 million shares, up 8%.
“Going forward, we expect the market to remain positive and recommend investors to buy on dips,” the analyst concluded.
Overall, trading volumes rose to 431.9 million shares compared with Tuesday’s tally of 406 million. The value of shares traded during the day was Rs13.5 billion.
Shares of 425 companies were traded. At the end of the day, 341 stocks closed higher, 70 declined and 14 remained unchanged.
Hascol Petroleum was the volume leader with 59.7 million shares, gaining Rs0.97 to close at Rs16.82. It was followed by Unity Foods with 34.6 million shares, gaining Rs1.10 to close at Rs15.86 and TRG Pakistan with 23.9 million shares, gaining Rs3.10 to close at Rs45.19.
Foreign institutional investors were net sellers of Rs159.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ