Stocks gain for second session on institutional buying

Stocks rose for a second straight session on Wednesday led by institutional investors buying of blue chips amid expectations of better corporate earnings, dealers said.

“Investor sentiments improved following comments of state minister for finance Rana Muhammad, who said that the government would announce tax amnesty scheme’ for overseas Pakistanis by mid of March 2018,” Topline Securities said in its post market note. “The government is also mulling to reduce corporate tax rate from 30 percent to 20 percent in a phased manner.” The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share index gained 0.57 percent or 244.49 points to close at 43,239.45 points. The highest index of the day remained at 43,322.95 points while the lowest level of the day was recorded at 42,994.96 points. KSE-30 Index also rose 169.70 points to 21,755.84 points.

Turnover also increased seven million shares to 151.36 million shares from 144.88 million shares. Trading value increased to Rs7.14 billion from Rs6.81 billion while market capital expanded to Rs9.02 trillion from 8.98 trillion. Out of 378 companies’ active in the session, 193 closed in green, 165 in red while 20 remained unchanged.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed bullish led by blue-chip oil and cement stocks on “institutional speculations in the earnings season”.

He said surging fiscal deficit data for July-Feb at 3.2 percent of the GDP, concerns for outcome of the IMF $3 billion repayment by June and uncertainty over pre-poll privatisation of public sector enterprises invited mid-session pressure.

Analyst Danish Ladhani at JS Research said major heavyweights, namely OGDC (up 0.56 percent), PPL (up 2.44 percent), ENGRO (up 1.75 percent), LUCK (up 1.97 percent) and HUBC (up 1.48 percent) cumulatively contributed 143 points to the index. “Moving forward, we expect market to remain positive with flows from the local institutions and foreigners directing the market,” Ladhani said.

Banks came under pressure as HBL (down 0.64 percent), ABL (down 1.06 percent) and UBL (down 1.07 percent) led the decline following the Supreme Court ruling, directing the aforementioned banks to immediately raise the minimum pension to Rs8,000 per month. The payments will be prospective, that is, from the date of the judgment.

Moreover, FABL (up 3.25 percent) closed in the green as the bank has announced full year 2017 EPS at Rs3.42 up five percent year on year. The bank also announced 15 percent bonus for 2017, with no cash payout.

On the positive side, OMCs drove the index where PSO (up 2.73 percent) SHEL (up 1.87 percent) closed in the green, as prices of high-speed diesel (HSD) and petrol likely to increase by almost Rs7 and Rs4/litre due to increased rates in the international market.

Highest increase was recorded in shares of Wyeth Pak Ltd, which rose Rs90.54 to Rs1,901.52/share, followed by Bata (Pak) that increased Rs74.61 to Rs2,899.60/share. Major decline was noted in shares of Mari Petroleum, which fell Rs62.97 to Rs1,471.89/share, followed by Bhanero Textile that decreased Rs44.87 to Rs852.60/share.

Significant turnover was recorded in stocks of Byco Petroleum, Agritech Limited, Azgard Nine, Dost Steels Ltd, Engro Polymer, TRG Pak Ltd, Matco Foods Ltd, Pak Elektron, Lotte Chemical and Engro Fertililzers.

Byco Petroleum remained the volume leader with 15.51 million shares with an increase of 64 paisas to Rs15.72/share. It was followed by Agritech Limited with 14.59 million shares with a decrease of 17 paisas to Rs7.68/share.

Shares’ turnover in the future contracts plunged to 31.11 million shares from 136.06 million shares traded in the previous session.​