Bourse rallies, led by E&P stocks

Benchmark KSE-100 index rises 485.96 points to settle at 40,155.16

KARACHI:

Pakistan’s stock market made a handsome recovery on Monday following previous week’s battering as government’s move to rein in the growing circular debt and a slight easing of political noise sparked optimism among investors.

Market players welcomed the news of revising the circular debt management roadmap and the constitution of a committee to address the challenge.

Stocks of the exploration and production (E&P) sector were in the limelight as the KSE-100 index surged nearly 500 points in what one analyst said was a "year-end rally". "Stocks showed a sharp recovery in the year-end rally at attactive valuations and speculation about the positive outcome of the constitution of committee by the Ministry of Finance to resolve  the Rs1.5 trillion circular debt crisis in the gas sector,” said Ahsan Mehanti, MD of Arif Habib Corp.

“PTI chief’s hint at Punjab chief minister taking a vote of confidence before January 11, which eased the political noise, and surging golbal equities and crude oil prices played the role of catalysts in bullish activity in the market,” he said. At close, the benchmark KSE-100 index recorded an increase of 485.96 points, or 1.23%, at 40,155.16.

Topline Securities, in its report, said that Pakistan equities closed positive as the benchmark KSE-100 index settled at 40,155, yp 1.23%.

A positive opening was witnessed as investors cheered news that the Ministry of Energy had agreed to come up with a revised roadmap for circular debt management acceptable to both the government as well as the IMF.

That provided support to Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL), Pakistan State Oil, Pakistan Oilfields Limited, Sui Northern Gas Pipelines Limited and Sui Southern Gas Company, which closed higher, it said.

Trading volume and value for the day stood at 146.9 million shares, up 11% and Rs5.1 billion, up 12% respectively. PPL was the volume leader with trading in 11.1 million shares, Topline added.

Arif Habib Limited, in its report, said that the week started with a positive session at the PSX. The market opened in the positive zone and stayed in the green all day long. Investors’ participation remained healthy in the E&P sector on expectation of resolution of gas sector’s circular debt, it said.

“The index went up by 698 points in intra-day trading. Robust volumes were observed in the main board, though third-tier stocks remained in the spotlight.”

The index closed at 40,155.16, up by 485.96 points (+1.23% day-on-day). Sectors contributing to the performance included E&P (+177.1 points), fertiliser (+56.7 points), miscellaneous (+50.6 points), cement (+49.1 points) and oil marketing companies (+39.5 points), the AHL report added.

JS Global analyst Muhammad Shuja Qureshi said that as political tensions abated for the time being,

investors took the opportunity to accumulate oversold stocks and the index gained 486 points to close at 40,155.

PPL (+7.5%) and OGDCL (+5.3%) were off to a flying start and set the tone for the day. Other notable gainers were Lotte Chemical (+7.5%), Attock Refinery (+7.2%) and National Refinery (+5.3%), he said. “Investors are advised to book profits and wait for dips for any fresh buying,” the analyst added.

Overall trading volumes increased to 146.9 million shares compared with Friday’s tally of 132.6 million. The value of shares traded during the day was Rs5.1 billion. Shares of 329 companies were traded during the day. Of these, 207 stocks closed higher, 108 declined and 14 remained unchanged.

PPL was the volume leader with 11.1 million shares, gaining Rs4.31 to close at Rs61.78. It was followed by OGDCL with 7.7 million shares, gaining Rs3.89 to close at Rs76.87 and WorldCall Telecom with 6.8 million shares, gaining Rs0.03 to close at Rs1.23. Foreign investors were net buyers of Rs156.5 million worth of shares during the trading session, according to data com- piled by the National Clearing Company of Pakistan.