Stocks gain on attractive valuation, SC comments

Stocks surged 2.5 percent on Tuesday on hopes that the Supreme Court, hearing Panama corruption case, may refer the matter to an accountability court, thus giving more time to the Prime Minister Nawaz Sharif, dealer said.

Ahsan Mehanti at Arif Habib Corp said stocks closed bullish after the court observed whether to rule on the prime minister disqualification itself or engaging accountability court to decide on JIT probe, inviting speculation over outcome of hearings.

The Pakistan Stock Exchange benchmark KSE-100 shares index gained 2.5 percent or 1,113.15 points to close at 45,636.36 points. KSE-30 shares index gained 2.7 percent or 626.53 points to close at 23,843.63 points.

As many as 373 scrips were active of which 307 advanced, 56 declined and 10 remained unchanged. The ready market volumes stood at 158.319 million shares as compared with the turnover of 75.287 million shares a day earlier.

Arslan Soomro, senior advisor at Tundra Fonder said the turnover was low because of the anxiety of investors over the Panama case outcome. “Until the verdict is given - disqualification or referral to NAB - the investors will not be able to form a directional strategy on the market.”

Dealers said positive sentiment in the market could also be attributed to attractive valuations of the KSE-100 index stocks. United Bank (UBL) up 3.42 percent, Allied Bank (ABL) up 2.31 percent and MCB up 2.33 percent were the major gainers, cumulatively contributing 113 points to the index. Sui Southern Gas (SSGC) up 3.85 percent from the gas utilities gained to close in the green zone on back of the news that SSGC is set to complete the 24-inch diameter gas pipeline from Shikarpur to Jacobabad in Sindh by the end of next month.

Analyst Maaz Mulla at JS Global said after weeks of speculation and volatility, resulting from events on the political front, market had reached to attractive levels. “Many stocks offered at rates lower than their intrinsic values have encouraged investors into stock accumulation.”

Companies reflecting highest gains include Phillip Morris Pakistan, up Rs125.85 to close at Rs2,645/share and Sanofi Aventis, up Rs47.49 to close at Rs1,767.49/share.

Companies reflecting most losses include Bata Pakistan, down Rs73 to close at Rs3,100/share and Colgate Palmolive down Rs55 to end at Rs2,300/share.

Highest volumes were witnessed in TRG Pakistan with a turnover of 11.25 million shares. The scrip gained Rs1.79 to close at Rs37.79/share.

K-Electric was second with a turnover of 8.91 million shares. It gained 08 paisas to close at Rs6.69/share. Aisha Steel was third with a turnover of 7.197 million shares. It gained 59 paisas to finish at Rs19.51/share.