Stocks rise on monetary policy

The Pakistan Stock Exchange on Monday witnessed the revival of investor interest on optimism that the State Bank of Pakistan (SBP) would maintain status quo in its monetary policy announcement. The market kicked off trading on a positive note and soon the benchmark KSE100 index touched intra-day high of 42,441.29 points.

Investor optimism was also fuelled by a statement from Finance Minister Ishaq Dar that Pakistan would not seek debt restructuring from the Paris Club and would meet all multilateral and international payment obligations. However, the index receded during midday trading and remained range bound in late hours, erasing most of the gains. Later, the State Bank left the benchmark policy rate unchanged at 15% for the next seven weeks. At close, the benchmark KSE-100 index recorded an increase of 126.39 points, or 0.3%, to settle at 42,211.64.

Topline Securities, in its report, said the KSE-100 index largely traded in the positive zone, which could be attributed to Finance Minister Ishaq Dar’s statement that Pakistan would not seek debt restructuring from the Paris Club and would meet all multilateral, international and bond payments. Major contribution to the index came from TRG Pakistan, Lotte Chemical, Oil and Gas Development Company, Pak Elektron and Dawood Hercules as they cumulatively contributed 144 points. On the flip side, Meezan Bank, Engro Fertilisers, Engro Corporation, Frieslandcampina Engro Pakistan and ColgatePalmolive lost value, removing 86 points from the index.

Traded volume and value for the day stood at 240 million shares (down 23%) and Rs10.5 billion (up 12%) respectively. WorldCall Telecom was the volume leader with trading in 31 million shares, Topline added. Arif Habib Limited, in its report, said bulls and bears engaged in a battle throughout the trading session. In anticipation of a rate cut in the monetary policy, the market opened in the green and remained positive for most of the day, it said. “Main board volumes fell as investor participation remained sluggish, although third-tier stocks were in the limelight.”

The index closed at 42,211.64, up 126.39 points (0.30%). Sectors contributing to the performance included technology (+92.4 points), cement (+36.2 points), E&P (+23.9 points), chemical (+16.9 points) and cable and electrical goods (+13.2 points), the Arif Habib report added. JS Research analyst Waqar Iqbal said bulls made a comeback, leading the KSE100 index, which closed at 42,212, up 126 points. “Investor interest was witnessed in technology and cement sectors,” he said. “We recommend investors to avail any downside as an opportunity to buy in cement, banking and E&P sectors,” the analyst said.

Overall trading volumes decreased to 240.2 million shares compared with Friday’s tally of 313.3 million. The value of shares traded during the day was Rs10.5 billion. Shares of 336 companies were traded. At the end of the day, 161 stocks closed higher, 149 declined and 26 remained unchanged. WorldCall Telecom was the volume leader with 31.2 million shares, gaining Rs0.03 to close at Rs1.63. It was followed by Pak Elektron with 27.1 million shares, gaining Rs1.2 to close at Rs17.45 and TRG Pakistan with 26.7 million shares, gaining Rs7.29 to close at Rs151.43. Foreign investors were net buyers of Rs1.5 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.