Market watch: Stocks recover on Wacog bill approval

Benchmark KSE-100 index adds 234.77 points to settle at 45,675.87

KARACHI:

The Pakistan Stock Exchange managed to record a decent rally on Friday as the benchmark KSE-100 index, after staying in the green zone throughout the day, added 235 points to close the week on a positive note.

The investors particularly cheered the Senate’s nod on the long-pending legislation to implement the weighted average cost of gas (Wacog) for the sale of local and imported LNG, which lifted the gas sector stocks upward.

Moreover, the news flow regarding the rise in foreign direct investment (FDI) by 11% in July-January period of fiscal year 2021-22 further bolstered the confidence of market players.

The market opened on a positive note but soon started to witness fluctuations. By the end of the first half, the index managed to close at a level of 45,517 points.

With the commencement of the second half, the index began its journey towards north with a steady pace, owing to the positive macroeconomic developments.

However, late session profit-taking erased some of the gains.

At close, the benchmark KSE-100 index recorded an increase of 234.77 points, or 0.52%, to settle at 45,675.87 points.

In its report, Arif Habib Limited stated that the market witnessed positive momentum along with improved trading volumes due to a decline in crude oil prices.

The approval of two new bills by the Senate pertaining to the gas sector, namely ‘Oil and Gas Regulatory Authority (Amendment) Bill, 2022’ and ‘Weighted Average Cost of Gas (Wacog) Bill’, led Sui Northern Gas Pipelines (SNGP), Sui Southern Gas Company (SSGC), Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL) and Pakistan State Oil (PSO) to close in the green zone.

In the banking sector, the Bank of Punjab remained in the limelight as it announced financial results declaring 12.5% bonus shares and earnings per share beating market expectations.

Sectors contributing to the performance included banks (+47.4 points), fertiliser (+36.3 points), oil marketing companies (+34.2 points), exploration and production (+31.6 points) and cement (+28.3 points).

Topline Securities, in its report, said that the positivity in the market can be attributed to the Wacog bill that got passed from the Senate, which will result in lower circular debt pile up.

Resultantly, OGDC, PPL and SNGP were among the top contributors with 60 points.

Moreover, Engro Fertilisers (EFERT) and United Bank Limited (UBL) added 51 points to the index.

“Bank of Punjab, which was the volume leader, declared its fourth quarter 2021 results, in which it posted earnings per share at Rs1.4, along with a bonus issue of 12.5%,” the report said.

In cements, “DG Khan Cement declared its second quarter 2021-22 results, in which it posted unconsolidated earnings per share of Rs2.9”, the report added.

JS Global analyst Waqar Iqbal said that the market started on a dull note with traded volume in the All Shares index restrained to 70 million shares during the first half.

Bank of Punjab reported its full year result which generated decent volume in the stock.

Major index movers were Oil and Gas Development Company, Engro Fertiliser, UBL, Sui Northern Gas Pipeline and MCB.

“We expect the market to remain range-bound due to futures’ rollover next week,” the analyst said.

Overall trading volumes rose to 194.05 million shares compared with Thursday’s tally of 152.9 million. The value of shares traded during the day was Rs4.3 billion.

Shares of 333 companies were traded. At the end of the day, 179 stocks closed higher, 131 declined and 23 remained unchanged.

Bank of Punjab was the volume leader with 60.3 million shares, losing Rs0.1 to close at Rs8.26. It was followed by Soneri Bank with 16.3 million shares, gaining Rs0.02 to close at Rs10.50 and Telecard Limited with 11.1 million shares, losing Rs0.11 to close at Rs15.99.

Foreign institutional investors were net sellers of Rs215.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.