Stocks advance on FATF’s reclassification

Benchmark KSE100 index gains 133.75 points to settle at 42,347.23

KARACHI:

The Pakistan Stock Exchange (PSX) gained ground on Monday as the Asian Development Bank (ADB) approved a $1.5 billion emergency loan coupled with removal of Islamabad from the grey list of Financial Action Task Force (FATF), which rejuvenated investor interest. Investors cheered Pakistan’s reclassification by the FATF and engaged in fresh stock buying. Furthermore, optimism about the approval of emergency loan of $1.5 billion aided positive momentum at the bourse. The benchmark KSE-100 index sustained the uptrend throughout the trading session.

However, political turmoil dented buying interest in the final hour, forcing investors to withdraw to the sidelines. As a result, the index touched an intra-day low of 42,213.48 points. However, the market managed to close the day in the green. At close, the benchmark KSE-100 index recorded an increase of 133.75 points, or 0.32%, to settle at 42,347.23. Topline Securities, in its report, said that Pakistan equities commenced trading on a jubilant note due to approval of a loan of $1.5 billion by the ADB and the country’s reclassification by the FATF. The KSE-100 index opened in the green zone and hit an intra-day high of 42,672 (+459 points; or 1.08%).

At that point, profit-taking kicked in, which pushed the index to eventually settle at 42,347 (+134 points, or 0.32%). Tech, fertiliser, power and E&P-sector stocks contributed positively to the index where TRG Pakistan, Engro Fertilisers, Hub Power, Mari Petroleum and Fauji Fertiliser Company added a total of 112 points, it said. On the flip side, Habib Metropolitan Bank, Lotte Chemical and NEP witnessed some profit-taking as they lost 26 points collectively. Around 227 million shares were traded at the bourse while total value came in at Rs6 billion. WorldCall Telecom led the volumes chart with trading in 68.7 million shares, Topline report added. Arif Habib Limited, in its report, said that the benchmark KSE-100 index recorded a range-bound session.

Despite having astounding news that Pakistan had been taken off the grey list of FATF, the PSX was unable to capitalise on the opportunity because of political upheaval as investors’ participation remained sideways. “The main board had reasonable volumes, although top volume leaders were third-tier stocks,” it said. The index closed at 42,347.23, up by 133.75 points (0.32% dayon-day). Sectors contributing to the performance included technology and communication (46.9 points), fertiliser (40.9 points), E&P (24.4 points), power generation and distribution (22.6 points) and automobile parts and accessories (7.2 points). Volumes decreased from 289.6 million shares to 226.7 million (-21.7%).

Traded value decreased by 22.9% to $27.5 million against $35.6 million on Friday, Arif Habib report added. JS Research analyst Mubashir Anis Naviwala said that the KSE-100 index kicked off trading on a positive note on the back of Pakistan’s removal from the FATF’s grey list. The index touched an intraday high of +459 points and eventually closed at 42,347, gaining 134 points compared to the previous close. Traded volumes stood at 227 million shares where WorldCall Telecom (+4.6%), Dewan Farooque Motors (+8.9%), Pakistan Refinery (+0.6%), Hascol Petroleum (+1.8%) and TRG Pakistan (+3.1%) were the major contributors.

“Going forward, we recommend investors to stay cautious at current levels and wait for dips for any fresh buying,” the analyst said. Overall trading volumes decreased to 226.7 million shares compared with Friday’s tally of 289.6 million. The value of shares traded during the day was Rs6.05 billion. Shares of 343 companies were traded. At the end of the day, 160 stocks closed higher, 149 declined and 34 remained unchanged. WorldCall Telecom was the volume leader with 68.8 million shares, gaining Rs0.07 to close at Rs1.59. It was followed by Dewan Farooque Motors with 12.4 million shares, gaining Rs0.92 to close at Rs11.21 and Pakistan Refinery with 9.5 million shares, gaining Rs0.1 to close at Rs17.91. Foreign investors were net sellers of Rs81.6 million worth of shares during the trading session, according to data compiled by NCCPL.