Market watch: Stocks gain as upbeat data lifts mood
Shares of 337 companies were traded. At the end of the day, 151 stocks closed higher, 163 declined and 23 remained unchanged. PHOTO: FILE
Taking cue from last week, the stock market extended gains on Monday and ended up nearly 180 points as investors cheered the upbeat foreign direct investment (FDI) data released on Friday.
According to statistics unveiled by the State Bank of Pakistan, FDI hit a six-month high at $189 million in September.
In the morning, stock trading began on a bearish note, however, it could not last long because investors started cherry-picking, lifting the market upwards. The market continued to oscillate between red and green territories throughout the session.
The brief stay in the red was attributed to the second power show held in Karachi on Sunday by the Pakistan Democratic Movement (PDA) – an alliance formed by opposition parties – against the current Pakistan Tehreek-e-Insaf (PTI) government.
Moreover, the news of Pakistan Muslim League-Nawaz (PML-N) leader Captain (Retd) Mohammad Safdar being arrested in Karachi a day after he raised slogans at the Quaid’s mausoleum added fuel to the bearish activity.
However, despite the ongoing political turmoil, bulls managed to win control of the bourse on upbeat fertiliser sales coupled with expectations about upcoming corporate earnings for the quarter ended September 30.
At close, the benchmark KSE-100 index recorded an increase of 176.15 points, or 0.44%, to settle at 40,340.17 points.
Arif Habib Limited, in its report, stated that the market discounted the anticipated negative impact of demonstration and gathering organised by the combined opposition against the PTI government.
“Investors’ interest was dampened at the close of previous trading session (last week) and it was feared to deteriorate further post allegations made by the PML-N against the military,” it said, adding, “However, contrary to the general feeling, the index sided with positive expectation about the upcoming quarterly results that helped it trade in the green for most of the session.”
Moreover, announcement is also due from the Financial Action Task Force (FATF) plenary session, scheduled to be held this week, where Pakistan may get relief from the Enhanced Follow-up List.
“Fertiliser numbers helped listed fertiliser stocks to post gains, especially Engro Fertilisers and Engro Corporation,” the report added.
“Post-announcement of financial results last Friday, HBL gained further, however, profit-booking brought the stock price slightly down from the last trading day’s closing price.”
The exploration and production sector also contributed positively to the index with earnings of four listed companies due to be announced in the coming days.
Sectors contributing to the performance included fertiliser (+87 points), exploration and production (+31 points), oil and gas marketing (+19 points), transport (+15 points) and vanaspati (+14 points).
Individually, stocks that contributed positively to the index included Engro Corporation (+62 points), Engro Fertilisers (+23 points), Mari Petroleum (+20 points), Meezan Bank (+16 points) and Pakistan International Bulk Terminal (+15 points).
Stocks that contributed negatively were HBL (-13 points), MCB (-12 points), Pakistan Oilfields (-5 points), Pakistan Tobacco (-5 points) and NBP (-5 points).
JS Global analyst Danish Ladhani said the benchmark KSE-100 index gained 176 points after touching intraday high and low of +327 and -86 points. It closed the session in the green at 40,340.
“The market remained volatile with low volumes and low participation ahead of FATF meeting and due to political uncertainty,” he stated.
Major gainers were Engro Corporation (+2.9%), Engro Fertilisers (+2.7%), Mari Petroleum (+2.6%), Meezan Bank (+2.4%), Oil and Gas Development Company (+0.7%) and Shell Pakistan (+7.5%), which contributed to positive close of the market.
Mari Petroleum in the exploration and production sector reported 1QFY21 earnings per share of Rs67.69 versus Rs55.94 in the same period of last year.
BankIslami Pakistan (-0.2%) in the financial sector reported 3QCY20 earnings per share of Rs0.42 versus loss per share of Rs0.13 in the same period of last year.
“Avanceon Automation and Control WLL, a subsidiary of Avanceon Limited AVN (+3.2%) in Qatar, has got contract to provide the Intelligent Transport System for the Public Works Authority,” Ladhani added.
Traded value was slightly higher at $49 million, up 3% and volumes stood at 319 million, up 26% compared to the last trading session.
“Going forward, we expect the market to trade sideways and recommend investors to sell on strength,” the analyst said.
Overall, trading volumes rose to 319.6 million shares compared with Friday’s tally of 254.2 million. The value of shares traded during the day was Rs7.96 billion.
Shares of 392 companies were traded. At the end of the day, 233 stocks closed higher, 140 declined and 19 remained unchanged.
Unity Foods was the volume leader with 53.7 million shares, gaining Rs1.28 to close at Rs19. It was followed by Pakistan International Bulk Terminal with 36.6 million shares, gaining Rs0.76 to close at Rs12.91 and Fauji Foods with 26.7 million shares, gaining Rs1.01 to close at Rs16.37.
Foreign institutional investors were net sellers of Rs173.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.