Market watch: KSE-100 crawls up amid pre-budget uncertainty

Benchmark index gains 90.96 points to close at 48,302.66

KARACHI:

The Pakistan Stock Exchange (PSX) commenced the week on a positive note on Monday, though uncertainty prevailed before the announcement of federal budget later in the week.

The market showed signs of nervousness throughout the day with panic selling emerging at some point. Investor concern over a crucial meeting with the International Monetary Fund (IMF) on taxes triggered cautious trading.

Nevertheless, upbeat news about Pakistan’s stance on all issues related to the Financial Action Task Force’s (FATF) grey list coupled with payment of circular debt instalment to independent power producers (IPPs) kept the investment climate positive.

Earlier, trading began on a positive note, however, selling pressure emerged within the first hour, which dragged the market down. From that point onwards, cherry-picking by market players helped lift the KSE-100 index upward and it closed with nominal gains.

At close, the benchmark KSE-100 index recorded an increase of 90.96 points, or 0.19%, to settle at 48,302.66.

Arif Habib Limited, in its report, stated that the market saw heavy selling pressure despite the positive news flow over the weekend. These reports included possible reduction in capital gains tax, duty cut for auto manufacturers and circular debt payments to the IPPs.

Reportedly, International Steels increased steel prices, which helped the company’s stock price gain ground. However, profit-booking brought the price below last trading day’s closing level by the time of market closure, it said.

Exploration and production, refinery, oil and gas marketing and technology sectors bore selling pressure. Kot Addu Power Company, which was the main beneficiary of the release of circular debt-related funds by the government, could not stand firm as selling pressure brought its price below previous day’s closing price.

Sectors contributing to the performance included glass (+22 points), fertiliser (+19 points), textile (+18 points), power (+14 points) and cement (+12 points).

Individually, stocks that contributed positively to the index included Systems Limited (+27 points), Ghani Glass (+22 points), Kohinoor Textile Mills (+19 points), Hubco (+12 points) and Pakistan Telecommunication Company (+11 points).

Stocks that contributed negatively were TRG Pakistan (-25 points), Pakistan State Oil (-12 points), Pakistan Petroleum (-10 points), Nishat Mills (-9 points) and HBL (-9 points).

JS Global analyst Maaz Mulla said that the KSE-100 index stayed in the green zone throughout the day, gaining 91 points to close at 48,302.

Total traded volumes stood at 936 million shares, where major contributors were Hum Network (+9.3%), WorldCall Telecom (-0.3%), Pakistan Telecommunication Company (+6.6%), Byco Petroleum (+0.4%) and Telecard Limited (+3.3%).

Mulla added that cement dispatches were recorded at 3.947 million tons in May 2021 against 2.634 million tons during the same month of last year. As a result, Flying Cement (+5%), Pioneer Cement (+2%), Maple Leaf Cement (+1.1%) and DG Khan Cement (+0.3%) closed in the green.

The government on Friday completed Rs89.2 billion worth of transactions as a first installment of payments to 20 IPPs out of a total of Rs403 billion committed under a settlement agreement with 46 IPPs in February.

“Going forward, we advise investors to view any dip as a buying opportunity in consumer and export-oriented sectors,” the analyst said.

Overall trading volumes surged to 936.1 million shares compared with Friday’s tally of 867.3 million. The value of shares traded during the day was Rs27.7 billion.

Shares of 428 companies were traded. At the end of the day, 225 stocks closed higher, 181 declined and 22 remained unchanged.

Hum Network was the volume leader with 118.2 million shares, gaining Rs0.74 to close at Rs8.68. It was followed by WorldCall Telecom with 80.7 million shares, losing Rs0.01 to close at Rs3.50 and Pakistan Telecommunication Company with 64.8 million shares, gaining Rs0.78 to close at Rs12.64.

Foreign institutional investors were net sellers of Rs184.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.