Market watch: Stocks tick up despite political uncertainty

KARACHI:

The Pakistan Stock Exchange ended the week on a bullish note on Friday, despite political uncertainty taking a toll on market performance.

Investors kept their eyes on Gujranwala as top opposition leaders geared up for the first show of power in their anti-government campaign under the banner of Pakistan Democratic Movement (PDM).

In the backdrop of a worsening political scenario coupled with economic uncertainty, the market performance remained subdued in the first session. However, bulls roared back in the second session and the benchmark KSE-100 index moved north.

The market’s advance was attributed to brisk buying in cement and banking sector stocks.

In the banking sector, Habib Bank Limited (HBL) posted its financial results for third quarter of the current calendar year, with earnings per share of Rs6.85, up 104% year-on-year, which strengthened investors’ sentiment.

Moreover, cement sector stocks picked up pace towards the end of the session with heavy buying in DG Khan Cement.

At close, the benchmark KSE-100 index recorded an increase of 95.52 points, or 0.24%, to settle at 40,164.02 points.

Arif Habib Limited, in its report, stated that the market borne the pressure of political uncertainty as investors were worried over opposition parties’ protest rallies and sit-ins.

“Midday announcement of HBL’s financial results somewhat turned the tide and helped HBL trade near recent highs,” it said.

Brisk buying was also observed in the cement sector, particularly DG Khan Cement, in the last half hour that helped the index close positive.

Sectors contributing to the performance were banks (+130 points), textile (+12 points), vanaspati (+11 points), exploration and production (-25 points), food (-21 points) and autos (-7 points).

Individually, stocks that contributed positively to the index included HBL (+100 points), Meezan Bank (+26 points), Unity Foods (+11 points), Fauji Fertiliser Bin Qasim (+11 points) and DG Khan Cement (+10 points).

Stocks that contributed negatively were Pakistan Petroleum (-17 points), Lucky Cement (-16 points), Engro Corporation (-13 points), FrieslandCampina Engro Pakistan (-10 points) and Fauji Fertiliser (-10 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index gained 96 points after touching intraday high and low of +152 and -326 points. It closed at 40,164, up 0.24%.

“The market remained volatile with low volumes,” he said, adding, “Profit-taking was noted with little participation on the back of political situation as the opposition’s newly formed PDM was all set to stage its first rally in Gujranwala’s Jinnah Stadium on Friday in an effort to oust Prime Minister Imran Khan’s government.”

Moreover, the stock market remained under pressure ahead of the Financial Action Task Force (FATF) meeting on October 22-23, he said.

Financial and fertiliser stocks were the major gainers. HBL (+4.5%), Meezan Bank (+4.1%), NBP (+1.9), Engro Fertilisers (+0.3%), DG Khan Cement (+1.9%) and Nishat Mills (+1.4%) contributed positively to the index.

Furthermore, FrieslandCampina Engro Pakistan (-7.5%) reported 9MCY20 earnings per share of Rs0.42 versus loss per share of Rs1.05 in the same period of last year with no cash dividend.

“Going forward, we expect the market to trade sideways and recommend investors to sell on strength,” the analyst said.

Overall, trading volumes fell to 254.2 million shares compared with Thursday’s tally of 324.8 million. The value of shares traded during the day was Rs7.7 billion.

Shares of 391 companies were traded. At the end of the day, 225 stocks closed higher, 143 declined and 23 remained unchanged.

Unity Foods was the volume leader with 45.1 million shares, gaining Rs1.01 to close at Rs17.72. It was followed by Kohinoor Spinning Mills with 20.7 million shares, gaining Rs0.96 to close at Rs3.67 and Hascol Petroleum with 15.3 million shares, losing Rs0.10 to close at Rs15.42.

Foreign institutional investors were net sellers of Rs362.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.