Equities maintained upward momentum on Tuesday as investors gauged that decline in average infection ratio of Covid-19 would trigger a recovery in economic activities, business confidence, and soon generate revenues, dealers said.
Sateesh Balani, director research at Ismail Iqbal Securities, said, “Pakistan equities remained positive throughout the session, as the coronavirus infection ratio continued to drop in the country (hinting at a flattening of the curve) while there was increased liquidity due to lower investment returns on fixed income assets.”
However, Hub Power Company defied overall trend and closed marginally negative, as the stock was removed from KMI-30 index recently. Banks, cements and autos led the index gains, contributing 137 points, Balani added.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.48 percent or 170.58 points to close at 35,373.35 points level. KSE-30 shares index followed suit with a high of 0.23 percent or 34.33 points to end at 15,281.29 points level.
Of 394 active scrips, 207 moved up, 157 retreated, and 30 remained unchanged. The ready market volumes stood at 333.891 million shares, as compared with the turnover of 332.251 million shares in the previous session.
Saad Rafi, head of equity sales at Al Habib Capital Markets, said, “There has been continuous buying from individuals and some high net worth investors, who were now reluctant to invest in fixed income securities because of the lower rate of return.”
Moreover, equity was offering better returns. The curve of Covid-19 has started flattening, and the average infection rate has now come down to 14 percent from 20 percent. “Therefore, in the coming two or three months, the economic cycles would be revived and sales of all listed manufacturing companies would go up,” he added.
Salman Ahmad, head of institutional sales at Aba Ali Habib, said, “Closing above 35,000 points level has been termed as a good sign - witnessed after almost a month – for the last couple of sessions.”
Furthermore, gains in the global markets and stability in crude oil prices also acted as a positive factor. Investors hope that the manufacturing sector would show gains in the coming months, because of ease in lockdown globally and in Pakistan as well since industries have started picking pace, he added.
Analyst Muhammad Jawad Vohra from BMA Trading Desk said, “Going forward, upcoming corporate earning of the last quarter of FY20 will not be very encouraging due to countrywide lockdown.”
However, given the one year forward outlook, the investors would likely take interest in the cyclical and pharmaceutical sectors, Jawad added.
The top gainers were Rafhan Maize, gaining Rs150.00 to close at Rs7,340.00/share, and Indus Motor Company, up Rs78.01 to finish at Rs1,118.22/share.
The main losers were Unilever Foods, down Rs190.00 to close at Rs9,500.00/share, and Nestle Pakistan, down Rs95.00 to close at Rs6,750.00/share.
Pakistan Elektron posted the highest volumes with 32.968 million shares, but lost Re0.01 to end at Rs26.24/share.
Bank of Punjab turnover was the lowest with 5.315 million shares, whereas the scrip gained Re0.04 to end at Rs8.71/share.