Market watch: KSE-100 crosses 46,000 on monetary policy status quo

Benchmark index advances 219.60 points to settle at 46,087.64

KARACHI:

The stock market on Monday shed the gloom of previous week as KSE-100 index rose and powered past the 46,000-point mark following State Bank of Pakistan’s (SBP) decision to leave the benchmark interest rate unchanged at 7% for the next two months.

The market kicked off trading on a positive note and soon notched up intra-day gains of over 300 points but it receded after a short period and traded range bound for most of the day.

Investors’ interest was fuelled by comments from SBP Governor Reza Baqir during a press conference on Friday, which signalled that the policy rate may remain at the same level in the next monetary policy announcement in March.

Moreover, expectations of better financial results in different sectors and stable oil prices in the international market spurred buying interest. Government’s efforts to bring Covid-19 vaccine to Pakistan and a decline in fresh Covid-19 infections helped build confidence and lifted the index higher as optimism grew.

At close, the benchmark KSE-100 index recorded an increase of 219.60 points, or 0.48%, to settle at 46,087.64 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note on Monday, which was the first day of rollover week, and added a total of 321 points during the session. The KSE-100 index closed up 220 points.

“Cement, engineering (steel), power and oil and gas marketing companies contributed positively to the index in anticipation of better financial results for the Oct-Dec quarter,” it said.

The report added that technology sector stocks contributed positively to the index. Stocks that had high weightage in futures contracts and were subject to rollover traded in the positive zone, especially TRG Pakistan and NetSol.

Sectors contributing to the performance included technology (+96 points), cement (+49 points), pharmaceutical (+45 points), fertiliser (+38 points) and power (+22 points).

Individually, stocks that contributed positively to the index included TRG Pakistan (+85 points), Hubco (+20 points), Azgard Nine (+17 points), Unity Foods (+17 points) and Fauji Fertiliser (+17 points).

Stocks that contributed negatively were HBL (-24 points), Dawood Hercules (-17 points), Oil and Gas Development Company (-15 points), UBL (-13 points) and Meezan Bank (-12 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index started the rollover week positively and remained in the green throughout the day. It closed at 46,088, up 220 points.

Total traded volume for the day stood at 470 million shares with major contribution coming from K-Electric (+0.5%), Unity Foods (+4.2%), TRG Pakistan (+7.5%), Azgard Nine (+7.2%) and Fauji Foods (-1%).

The textile sector recorded trading activity as Azgard Nine (+7.2%), Crescent Textile Mills (+6.4%), Nishat Mills (+0.5%), Gul Ahmed Textile Mills (+0.2%) and Nishat Chunian (+0.1%) closed in the green.

According to news reports, AGP Limited (+7.5%) was granted permission to import vaccine for Covid-19 and consequently, its stock price skyrocketed and hit the upper cap.

Similarly, the technology sector gained some pace as TRG Pakistan (+7.5%) and Avanceon (+7.5%) hit the ceiling.

According to sources, the federal government has decided to hold a final round of talks with K-Electric’s top brass to resolve disputes, failing which the state would take over the power utility to clear its books and re-privatise it. Resultantly, K-Electric (+0.5%) contributed 8% to the total traded volume.

“We recommend investors to take any upside as an opportunity to sell stocks,” the analyst said.

Overall, trading volumes rose to 470.1 million shares compared with Friday’s tally of 430.6 million. The value of shares traded during the day was Rs21 billion.

Shares of 414 companies were traded. At the end of the day, 226 stocks closed higher, 166 declined and 22 remained unchanged.

K-Electric was the volume leader with 36.6 million shares, gaining Rs0.02 to close at Rs4.13. It was followed by Unity Foods with 36.3 million shares, gaining Rs1.37 to close at Rs34.31 and TRG Pakistan with 29.8 million shares, gaining Rs8.01 to close at Rs114.93.

Foreign institutional investors were net sellers of Rs807.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.