Market watch: Declining political noise sends KSE-100 soaring
Strong interest from investors helped extend the bullish spell at the Pakistan Stock Exchange on Tuesday and the KSE-100 index soared 616 points as political noise in the country eased.
Encouraging corporate results, coupled with stocks falling to attractive valuations, lent further support to the uptrend.
Moreover, the Financial Action Task Force’s (FATF) plenary session is scheduled to be held on October 21-23 where Pakistan expects to get relief from the Enhanced Follow-up List. The projection bolstered positive mood at the bourse and fuelled a buying spree.
Almost all index-heavy sectors including automobile, cement, financial and oil closed with substantial gains.
Earlier, trading began on a positive note and the KSE-100 index climbed steadily throughout the day. The advance accelerated towards the end of trading.
At close, the benchmark KSE-100 index recorded an increase of 616.41 points, or 1.53%, to settle at 40,956.58 points.
Arif Habib Limited, in its report, stated that as concerns over political uncertainty withered away, investors fixed their gaze on the upcoming FATF plenary session and quarterly corporate results.
Positive expectations on both counts helped the KSE-100 index to post a gain of 717 points during the session and it closed near the session’s high. Oil and gas marketing companies and exploration and production stocks contributed the most, followed by cement, power and banking stocks.
Among banks, investors preferred HBL over UBL with the former crossing Rs140 several times during the session, the report said.
JS Global analyst Danish Ladhani said the benchmark KSE-100 index hit intraday high of +717 points before closing the session at 40,956, up 616 points.
“The market remained bullish with decent volumes owing to positive sentiment with regard to the FATF meeting that will start on Wednesday,” he said. “On the political front, uncertainty still prevails about Pakistan Democratic Movement’s public rallies,” he said.
Hubco (+5%), Meezan Bank (+6.1%), Lucky Cement (+2.6%), Pakistan Petroleum (+2.8%), HBL (+1.3%) and PSO (+2.2%) contributed to the positive close.
Lotte Chemical (+3.8%) in the chemical sector reported 9MFY20 earnings per share (EPS) of Rs0.69 against EPS of Rs3.13 in the same period of previous year with no cash payout.
In the refinery sector, Attock Refinery (+7.5%) reported consolidated 1QFY21 loss per share (LPS) of Rs1.27 against EPS of Rs3.15 in the same period of last year with no payout. National Refinery (+7.4%) announced 1QFY21 LPS of Rs16.40 compared to LPS of Rs8.49 in the corresponding period of last year with no cash payout.
In the financial sector, Meezan Bank (+6.1%) announced 9MFY20 EPS of Rs12.93 against EPS of Rs7.67 last year with cash payout of Rs4 per share.
Traded value was recorded at $101 million, up 106% while volumes increased 54% to 492 million shares compared to the previous trading session.
“Going forward, we expect the market to remain volatile on political uncertainty and FATF expectations. Hence, we recommend investors to sell on strength,” the analyst said.
Overall, trading volumes rose to 492.7 million shares compared with Monday’s tally of 319.6 million. The value of shares traded during the day was Rs16.4 billion.
Shares of 416 companies were traded. At the end of the day, 305 stocks closed higher, 96 declined and 15 remained unchanged.
Unity Foods was the volume leader with 78 million shares, gaining Rs0.54 to close at Rs19.54. It was followed by Hascol Petroleum with 50.7 million shares, gaining Rs0.96 to close at Rs16.62 and Fauji Foods with 35.1 million shares, losing Rs0.16 to close at Rs16.21.
Foreign institutional investors were net buyers of Rs155 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.