Market watch: Despite political uncertainty, stocks rise

KARACHI:

The stock market extended its gains for the second consecutive day on Wednesday as the benchmark KSE-100 index rose nearly 200 points and crossed the 46,000-point mark.

Investors seemed to be ignoring the political uncertainty ahead of the crucial Senate vote and cautiously took fresh positions. The bull-run came on the back of strong investor sentiment, which fuelled buying interest post-corporate earnings season.

Improved cement sales data, with sales growing 1.98% to 4.577 million tons in February 2021 as compared to 4.489 million tons in February 2020, and surging crude oil prices in the international market lent support to the stock market.

The positive momentum was also aided by news of release of funds by the government under a deal signed with the independent power producers (IPPs).

Earlier, trading kicked off with a spike, following which the KSE-100 index rose steadily for most of the session.

At close, the benchmark KSE-100 index recorded an increase of 196.51 points, or 0.43%, to settle at 46,160.78 points.

Arif Habib Limited, in its report, stated that the market traded in the positive zone for most of the session with excitement about Wednesday’s Senate elections.

“Energy chain was the recipient of fresh flows from investors following release of funds by the government under a deal with the IPPs,” the report added.

Other than bank and exploration and production stocks, the overall market recorded price gains, especially cement, steel, oil and gas marketing, refinery and power sectors.

Sectors contributing to the performance included cement (+55 points), engineering (+26 points), oil and gas marketing (+24 points), power (+20 points) and auto (+17 points).

Individually, stocks that contributed positively to the index included MCB Bank (+23 points), International Industries (+21 points), Dawood Hercules (+16 points), Meezan Bank (+16 points) and Sui Northern Gas Pipelines (+15 points).

Stocks that contributed negatively were HBL (-35 points), UBL (-20 points), Pakistan Petroleum (-7 points), Pakistan Oilfields (-6 points) and Standard Chartered Bank (-6 points).

JS Global analyst Danish Ladhani said stock trading remained lacklustre as the KSE-100 index moved in a range of +225 and -41 points. The index closed the session at 46,161, up 0.4%.

Top volume leaders Azgard Nine (+3%), Byco Petroleum (+2.7%), TRG Pakistan (0%), Pakistan Refinery (+6.7%), Aisha Steel Mills (+0.7%), Unity Foods (+3.3%) and Ghani Glass (+7.4%) contributed a cumulative 162 million shares to the total volume.

Activity was noted in the cement sector where Cherat Cement (+3.1%), Kohat Cement (+0.9%), DG Khan Cement (+1.4%) and Lucky Cement (+0.2%) closed in the green.

Mixed sentiment was seen in the financial sector where HBL (-1.7%) and UBL (-1.4%) lost value while MCB (+1.3%) remained in the green.

“Moving forward, we expect the market to stay volatile and recommend investors to remain cautious. Any downside should be viewed as an opportunity to build positions in cement, refinery and textile sectors,” the analyst said.

Overall trading volumes increased to 403.7 million shares compared with Tuesday’s tally of 399.2 million. The value of shares traded during the day was Rs23.5 billion.

Shares of 407 companies were traded. At the end of the day, 238 stocks closed higher, 147 declined and 22 remained unchanged.

Azgard Nine was the volume leader with 32 million shares, gaining Rs0.97 to close at Rs33.85. It was followed by TRG Pakistan with 27.8 million shares, with no change in its value at Rs147.61 and Byco Petroleum with 27.6 million shares, gaining Rs0.27 to close at Rs10.24.

Foreign institutional investors were net sellers of Rs620.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.