Market watch: Stocks extend gains, end just shy of 47,000

KARACHI:

The Pakistan Stock Exchange (PSX) continued its uptrend on Wednesday owing to overall optimism on the back of a host of positive triggers. Consequently, the KSE-100 index gained over 350 points and closed near the 47,000-point mark.

Encouraging cement sales data released on Tuesday, which showed a 16% year-on-year jump in dispatches during January 2021, triggered a rally in cement sector stocks and most of them closed with gains. The uptrend was further fuelled by a rise in global equity and oil markets.

Earlier, trading began on a positive note and the local bourse remained on the uptrend as high trading volumes pushed the benchmark index above the 47,000 mark at midday.

The index surpassed the 47,000 barrier after three and a half years. It had last crossed the level on August 3, 2017. However, selling pressure emerging towards the end of session erased some of the gains and the index failed to sustain the 47,000 mark.

During the session, the KSE-100 index touched a 52-week high of 47,123.82 points, recovering 74% or 20,077.11 points from the 52-week low of 27,046.71 points recorded in March 2020.

At close, the benchmark KSE-100 index recorded an increase of 353.29 points, or 0.76%, to settle at 46,933.63 points.

Arif Habib Limited, in its report, stated that the market assertively crossed the 47,000-point mark, adding a total of 543 points. It closed the session up by 353 points.

Healthy contribution was observed in the cement sector, which was further aided by flows in fertiliser, banking and power sectors.

The news of steps towards implementing an agreement between the independent power producers (IPPs) and the government kept investor interest alive for the second consecutive day, which saw Hubco rise from previous day’s closing level, the report added.

The cement sector fared well in anticipation of an increase in cement prices per bag as well as growth in dispatches. International crude oil prices went up which helped exploration and production sector stocks to surge.

Sectors contributing to the performance included cement (+160 points), exploration and production (+102 points), pharmaceutical (+36 points), textile (+35 points) and banks (+32 points).

Individually, stocks that contributed positively to the index included Mari Petroleum (+60 points), Lucky Cement (+49 points), Cherat Cement (+30 points), Pakistan Oilfields (+27 points) and The Searle Company (+26 points).

Stocks that contributed negatively were TRG Pakistan (-41 points), Pakistan Tobacco Company (-11 points), International Industries (-8 points), Ghani Glass (-8 points) and Hascol Petroleum (-6 points).

JS Global analyst Danish Ladhani said the KSE-100 index remained positive throughout the trading session, touching intra-day high of +543 points. It closed the session at 46,934, up 353 points.

Activity was seen in the pharmaceutical sector where AGP (+1.1%) and Searle (+3.8%) closed in the positive zone as the former announced that the Drug Regulatory Authority of Pakistan (DRAP) had granted it authorisation for Covid vaccine.

“Moreover, in the cement sector, Pioneer Cement (+7.5%) and Cherat Cement (+7.5%) closed at their upper circuits on the back of a jump in cement sales by 17% in 7MFY21,” he said.

Gul Ahmed Textile Mills (+7.5%) closed at its upper circuit whereas Nishat Chunian (+5%) and Nishat Mills (+3.1%) remained in the green as overall exports crossed the $2 billion mark for the fourth consecutive month, mainly driven by a double-digit growth in proceeds from the textile and clothing sector.

In the financial sector, Bank Alfalah (-0.5%) announced CY20 consolidated earnings per share of Rs6.10 with cash payout of Rs2 per share.

“As the trend goes, we recommend investors to avail themselves of any upside as an opportunity to sell stocks,” the analyst said.

Overall, trading volumes surged to 616.3 million shares compared with Tuesday’s tally of 468.1 million. The value of shares traded during the day was Rs29.5 billion.

Shares of 438 companies were traded. At the end of the day, 236 stocks closed higher, 184 declined and 18 remained unchanged.

K-Electric was the volume leader with 59.3 million shares, gaining Rs0.18 to close at Rs4.67. It was followed by Pakistan Refinery with 39.98 million shares, gaining Rs1.49 to close at Rs27.92 and Hascol Petroleum with 32.8 million shares, losing Rs0.42 to close at Rs12.27.

Foreign institutional investors were net buyers of Rs422.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.