Stocks to take cue from review positives; blue-chips in focus

Pakistan stocks market is expected to take cue from budget related news and a possibility of regaining emerging market status, dealers said.

Last week, the market witnessed bullish sentiments in the blue-chip shares on the back of a likely reclassification.

A research report of the KASB Securities said the pickup in investor sentiment was driven by a possibility of a reclassification of the PSX by the Morgan Stanley Capital International (MSCI).

The benchmark 100-share Index of Pakistan Stock Exchange closed up 1,254.4 points, or 3.61 percent, week on week to 35,973.69 points. The average traded volume fell one percent to 239.9 million shares while value increased 8.1 percent to $121.3 million.

Foreign institutional portfolio investment recorded an inflow of $21.20 million compared to an outflow of $12.40 million last week. On the local front, individuals (with $16.06 million), banks ($13.28 million) and companies ($5.59 million) led the selling.

The past two-week of stellar performance and volume are likely to keep the momentum up. Key data points to track include update on International Monetary Fund’s talks over 11th review of the extended fund facility, politics and budget    related developments, it said.  

A report by AHL Research said the market is expected to remain optimistic in the coming week with an interest to be generated for the stocks likely beneficiary of reclassification.

“Top-tier scrips have risen at a phenomenal pace and momentum is to continue,” it said.

Analyst Faizan Ahmed at JS Research said the market also took cue from international crude oil prices as stability in prices led to aggressive buying in the oil and gas sector (up 3.9 percent week on week). Strong cement numbers and value buying in the banking sector stirred an excitement in the sectors.

Other key headlines of the week included approval of one billion dollar by the World Bank for economic reforms in Pakistan, Gwadar port becoming operational by end-Dec, inflation numbers, increase in tax collection, and cement sales numbers.

A report of Elixir Securities said the gains were primarily booked in blue-chips that are slated to be upgraded into MSCI EM Index.

Oils, tracking uptick in global oil prices, further extended the rally. Financials (MCB and HBL) were the primary contributor to the surge, adding 265 points cumulatively, followed by OGDC (up 102 points).  

Feroze1888, International Steel Limited, Mari Gas, Arif Habib Corporation and Lucky Cement were the major gainers while Murree Brewery, Kohat Cement, Attock Refinery, Lalpir Power Limited, and National Foods were the major losers in the benchmark index during the last week.