Market watch: Late session buying lifts KSE-100 index

Benchmark index gains 172.8 points to settle at 45,044.5

KARACHI:

The stock exchange staged a modest recovery on Monday and the KSE-100 index climbed 173 points as investors anticipated a successful conclusion of International Monetary Fund’s (IMF) review of Pakistan’s economy.

The optimism revived interest of market participants, who took fresh positions.

Moreover, market rumours suggesting that the Asian Development Bank would provide $2 billion each year to Pakistan, under its three-year Country Partnership Strategy, fuelled bullish sentiment.

However, the market brushed off a fresh drop in the rupee value against the US dollar to an all-time low as investors resorted to cherry-picking of stocks.

Earlier, trading began with a dip due to investor concern over the Pandora Papers and the KSE-100 index remained range bound for most of the session. A buying spree emerged later in the day, which helped the index to close above the 45,000-point barrier.

At close, the benchmark KSE-100 index recorded an increase of 172.80 points, or 0.39%, to settle at 45,044.50.

In a report, Arif Habib Limited stated that increased foreign outflow, due to reclassification of Pakistan from Morgan Stanley Capital International’s (MSCI) Emerging Markets to Frontier Markets, in recent sessions put added pressure on the index and the market on Monday was no different.

There were outflows from exploration and production, banking and fertiliser sectors. Local investors braced for further downside in these sectors, which was reflected in Pakistan Petroleum Limited, Pakistan Oilfields, Habib Bank Limited, Systems Limited and Engro Fertilisers.

An uptick in NetSol Technologies, TRG Pakistan and Avanceon just prior to the commencement of trading in Octopus Digital helped the index turn green, which was otherwise down by 310 points during the session.

The index recovered by the close of session and recorded a net increase of 173 points.

Sectors contributing to the performance included technology (+70 points), pharmaceuticals (+48 points), food (+21 points), chemical (+18 points) and investment banks (+13 points).

Stocks that contributed positively to the index were TRG Pakistan (+49 points), The Searle Company (+39 points), Colgate-Palmolive (+17 points), Avanceon (+17 points) and Engro Corporation (+16 points).

Stocks that contributed negatively included Pakistan Petroleum Limited (-23 points), Lucky Cement (-21 points), Pakistan Oilfields (-12 points), Fauji Fertiliser Company (-11 points) and Cherat Cement (-8 points).

JS Global analyst Maaz Mulla said that the benchmark index managed to close in the green by crossing the 45,000 level (+173 points).

On the news front, Avanceon, a wholly-owned subsidiary of AVN established in the Middle East, secured its first contract in the West African nation of Nigeria for reviving a key oilfield for the West African Exploration and Production Company.

The Searle Company announced its annual result, posting consolidated annual earnings per share of Rs15.8 with 20% cash dividend and 30% bonus shares.

“The outlook for the equity market shows consolidation at current levels, where investors are advised to build positions in mainly blue-chip stocks, especially double-digit dividend-yielding stocks,” the analyst said.

Overall trading volumes inched up to 267.2 million shares compared with Friday’s tally of 267.1 million. The value of shares traded during the day was Rs10.1 billion.

Shares of 545 companies were traded. At the end of the day, 348 stocks closed higher, 192 declined and five remained unchanged.

Telecard Limited was the volume leader with 25.7 million shares, gaining Rs1.2 to close at Rs19.19. It was followed by WorldCall Telecom with 21.6 million shares, gaining Rs0.15 to close at Rs2.93 and Summit Bank with 14.7 million shares, gaining Rs0.34 to close at Rs2.94.

Foreign institutional investors were net sellers of Rs614.27 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.