Market watch: KSE-100 touches near 4-year high

Benchmark index rises 335.54 points to close at 47,126.29

KARACHI:

The stock market shed the gloom of previous session on the last trading day of rollover week as the benchmark KSE-100 index rose 335 points, climbing to a near four-year high and surpassing the 47,000-point mark.

The index closed above 47,000 points for the first time since August 3, 2017, when it closed at 47,084.

Improving macroeconomic indicators coupled with positive expectations about the upcoming budget overshadowed any negative news flow.

Moreover, the State Bank of Pakistan (SBP) was set to announce the monetary policy towards the end of the session on Friday and many believed that the policy rate would be kept unchanged at 7%.

Later, in line with market expectations, the central bank maintained the status quo and left the benchmark interest rate unchanged at 7% for the next two months.

Earlier, the market opened on a positive note. Bears and bulls kept on wrestling during the day and the latter managed to dominate most of the trading. The uptrend accelerated after trading resumed in the second session.

At close, the benchmark KSE-100 index recorded an increase of 335.54 points, or 0.72%, to settle at 47,126.29.

Speaking to The Express Tribune, Pak-Kuwait Investment Company Head of Research Samiullah Tariq said that economic recovery triggered a rally.

“Moreover, favourable balance of payments data coupled with as-expected interest rate and 4% GDP growth projection further fuelled the uptrend,” the analyst said.

Tariq expected the market to sustain the positive momentum and stay close to the 47,000-point barrier.

Arif Habib Limited, in its report, stated that the market showed a consistent performance with further increase of 335 points.

Stocks of exploration and production, oil and gas marketing, banking and fertiliser sectors performed well despite a major sell-off in the exploration and production sector on Thursday due to MSCI rebalancing.

However, cement and steel-sector stocks did not contribute much to the index.

News reports about Pakistan’s green bonds as well as improved real GDP estimates helped lift investor sentiment, which was further aided by rising international crude oil prices, the report added.

Sectors contributing to the performance included banks (+98 points), exploration and production (+96 points), oil and gas marketing companies (+53 points), fertiliser (+39 points) and auto (+22 points).

Individually, stocks that contributed positively to the index included Bank AL Habib (+47 points), Systems Limited (+46 points), Pakistan Petroleum (+46 points), HBL (+39 points) and Oil and Gas Development Company (+35 points).

Stocks that contributed negatively were TRG Pakistan (-48 points), Adamjee Insurance (-11 points), DG Khan Cement (-8 points), Colgate-Palmolive (-7 points) and Searle (-5 points).

JS Global analyst Neelum Naz said that the market closed with a gain of 336 points at 47,126 – the highest level since 2017 – with 960 million shares changing hands during the day.

Nearly 40% of the total volume was contributed by WorldCall Telecom alone, a phenomenon which was prevalent throughout the week. Exploration and production and technology were the two sectors that were in the limelight.

Important news flow during the day included the expected approval of Rs900 billion as the federal Public Sector Development Programme (PSDP) for FY22 by the Annual Plan Coordination Committee and Bestway Cement’s greenfield expansion.

“Going forward, the equity market is expected to continue its bullish trend and we recommend investors to avail any dip as a buying opportunity,” the analyst said.

Overall trading volumes fell to 959.9 million shares compared with Thursday’s tally of 2.22 billion. The value of shares traded during the day was Rs22.7 billion.

Shares of 414 companies were traded. At the end of the day, 239 stocks closed higher, 160 declined and 15 remained unchanged.

WorldCall Telecom was the volume leader with 381.4 million shares, losing Rs0.24 to close at Rs3. It was followed by Silkbank with 56.3 million shares, gaining Rs0.06 to close at Rs1.58 and Byco Petroleum with 38.8 million shares, gaining Rs0.27 to close at Rs10.76.

Foreign institutional investors were net buyers of Rs517.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.