Pakistan stocks inch up; oil sector pares gains

Pakistan stocks on Monday managed to close marginally up despite that late selling in the energy sector on oil fall trimmed much of the gains of the index, dealers said.

“Stocks opened positive as participants tracked higher regional markets,” Ali Raza at Elixir Securities said in a note.

Raza, however, said limited institutional interest particularly in the index names and late selling in exploration and production sector corroded the gains. 

The Pakistan Stock Exchange’s (PSX) benchmark 100-share Index improved 69.40 points, or 0.21 percent, to close at 32,738.56 points.  KSE 30-share index inched down 2.40 points, or 0.01 percent, to end at 19,229.96 points.

Volumes increased 13 percent to 131.58 million shares. Trading value rose 10 percent to Rs6.28 billion. The market capitalisation, however, dropped Rs2 billion to Rs6.84 trillion. Of the total 342 active stocks, 163 closed up, 147 ended down and 32 remained unchanged.

Raza said Oil and Gas Development Company, Pakistan Petroleum Limited and Pakistan Oilfields Limited cumulatively eroded 68 points from the index, while oil marketing companies (namely Pakistan State Oil, HASCOL and SHEL) came under pressure on the news of oil and gas regulator opposing any increase in their margins.

Engro Foods closed at the upper limit of five percent, while its parent company Engro Crop rose 2.01 percent and contributed most to the session’s gains as participants bet on them fetching a premium price from the foreign acquirer, he added. “(We) see volatile trading pattern to continue in near term with participants closely monitoring regional markets, commodities and institutional flows.” 

Ovais Ahsan at JS Global Research said the bulls dominated the market as the index hit an intraday high of 209.50 points. Intraday rally could be attributed to the hike in the international crude oil prices. However, the decline in the oil prices to $39.50/barrel (Brent) in the second half forced major oil stocks to close in the red.

Similarly, profit taking was witnessed in the banking sector. Faysal Bank, MCB Bank ended down 0.48 percent and 0.04 percent, respectively.  Bank of Punjab, however, rose 2.49 percent on the back of the news that improvement in bad loans recovery is helping the bank make steady progress, Ahsan said.

Rally in pharmaceutical sector was witnessed on the back of anticipation of a hike in drug prices as SEARL closed at the upper limit of five percent. GLAXO rallied (up five percent) on the announcement of its scheme of arrangement of demerger, which will see its consumer healthcare division spun off in to a new entity, he added.

Automobile sector rose on account of weakening Yen and in a pre-result rally Pak Suzuki increased 2.52 percent.

Imposition of definitive anti-dumping duty by the National Tariff Commission on the import of hydrogen peroxide, originating from Bangladesh led Sitara Peroxide and Descon Oxychem to close at their upper circuit breakers.

NIB Bank was the volume leader with 23.65 million shares as it closed at Rs2.15. This was followed by Dewan Cement with 10.20 million shares. Its share value ended at Rs12.71. Bank of Punjab recorded a trade in 9.19 million shares, as its share price closed at Rs8.63.