Stocks up as oil rise keeps buying intact

Stocks continued to test the high level on Friday as oil rise kept investors at the buying end; however concern over the new tax policy made them to play safe, dealers said.

The Pakistan stock exchange continued its northwards movement in line with the global crude oil prices to close at a new high on Friday.

The 100-share Index of the Pakistan Stock Exchange (PSX) gained 153.29 points, or 0.42 percent, to close at 36,694.26 points. KSE-30 shares index rose 87.91 points, or 0.21 percent, to end at 21,243.27 points.

As many as 370 scrips were active; of which 185 ended up, 158 closed down and 27 remained unchanged.

The ready market volumes stood at 199.98 million shares as compared to 212.864 million shares in the last trading session.  Dealers said pressure remained in selected scrips on pre-budget uncertainty and falling banking spreads.

Analysts see volumes to remain on the lower side next week as participants look forward to budget announcement while cherry-picking in value plays. 

Financials and energy will keep the benchmark to hover in the range of 500-700 points.  Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed on the new highs, led by energy scrips as crude prices went up and there were reports on the upbeat GDP growth target of 5.7 percent, set by the government for the next fiscal year.

“Reports of over Rs1.6 trillion development allocations in the federal budget and a likely MSCI (Morgan Stanley Capital International) upgrade played a catalyst role in bullish close,” Mehanti said.

Analyst Faisal Bilwani at Elixir Securities said equities closed positive ahead of the weekend with gains in oils and select financials, pushing the benchmark to settle near 36,700.

“In a recurring pattern, stocks started at a slow pace with the market hunting for direction; however buying led by oils helped close the day with good turnover,” Bilwani said.

As expected Engro Foods (down 1.7 percent) was lower in the absence of any confirmation/update on stake sale talks. Engro Corp closed marginally positive (0.3 percent) as the company announced its expansion plans and a firmer footing in the energy space.

News of a 10 percent higher public spending in the next fiscal year with focus on infrastructure failed to generate any major excitement in cements as investors braced for a likely announcement of higher taxes in the coming budget.

Yet again, small and mid-caps led the volumes and most speculative plays ended the day higher on retail participation.

Companies, reflecting highest gains, included Sanofi Aventis (up Rs22.70 to close at Rs560/share). Pakistan Oilfields gained Rs14.4 to end at Rs352.76/share.

Companies, with major losses, included Nestle Pakistan (down Rs46.33 to end at Rs7,303.67/share). Murree Brewery shed Rs11.99 to end at Rs625.01/share.

Highest volumes were witnessed in K-Electric Limited with a turnover of 17.81 million shares. The scrip shed 17 paisas to close at Rs7.77/share. It was followed by Byco Petroleum with a turnover of 13.801 million shares. The stock value ended at Rs22.88 without any change in the value. TRG Pakistan was the third with a turnover of 12.684 million shares. It inched up 70 paisas to finish at Rs37.61/share.