Stocks rally 1.63 percent, led by strong institutional flows

Stocks rallied 1.63 percent as political calm, speculations over robust corporate earnings and stable oil prices lifted market sentiments led by strong institutional flows, dealers said.

An analyst at Arif Habib Limited said most of the index upsurge was backed by foreign buying interest, which had mainly been in banks, cement and E&P sector. “Participation of local institutions has been scant, however, and they are expected to increase participation going forward. Activity was witnessed across the board with cement sector driving the sentiment.”

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.63 percent or 718.86 points to close at 44,897.69 points. KSE-30 shares index gained 1.55 percent or 347.53 points to close at 22,739.89 points. As many as 396 scrips were active of which 295 advanced, 87 declined and 14 remained unchanged.

The ready market volumes stood at 194.35 million shares as compared with the turnover of 209.47 million shares a day earlier. An analyst said, “Central Bank’s report hinting 6.0 percent GDP growth, high cotton production data and reports of surging urea exports played a catalytic role in the bullish close.”

Jawad Abu Bakr at Elixir Securities said equities carried momentum from the last week and closed Monday with strong gains. “Market displayed relative strength as cements along with select notable blue-chips from oils, fertilisers and pharmaceuticals led the advance on strong institutional flows.”

Highlights were being DG Khan Cement, up 5.0 percent and Maple Leaf Cement, up 54.0 percent that closed at their respective upper price limits. On the leader board, Hub Power, up 4.0 percent contributed most points to KSE-100 Index.

Pakistan State Oil, up 3.9 percent too landed itself among top five movers with investors likely betting on inventory gains in the upcoming quarterly earnings. Analysts believe any further gains from current levels would require strong liquidity to sustain the ongoing bullish momentum; hence direction of foreign flows will be very critical.

Companies reflecting highest gains include Unilever Foods, up Rs301 to close at Rs7,900/share, and Sanofi Aventis, up Rs77.67 to close at Rs1,631.20/share. Companies reflecting most losses include United Brands, down Rs28 to close at Rs535/share, and Murree Brewery, down Rs20.84 to end at Rs785.16/share.

Highest volumes were witnessed in Amtex Limited with a turnover of 19.69 million shares. The scrip gained 58 paisas to close at Rs1.88/share. Power Cement was second with a turnover of 15.99 million shares. It gained 76 paisas to close at Rs10.07/share. TRG Pakistan was third with a turnover of 15.35 million shares. It gained Rs1.54 to finish at Rs36.36/share.