Stocks snap losing streak on institutional support

Stocks broke the losing drought on Tuesday, ending flat amid a resurgence of institutional buying interest in choice names after government’s reaffirmation of its commitments on its partnership with China in Belt and Road initiative, dealers said.

Ahsan Mehanti from Arif Habib Corporations said stocks showed recovery at the equity market on investor interest in selected cement, textile and oil scrips on strong valuations.

Mehanti added that uncertainty over amendments in revised finance bill, foreign outflows and reports of dismal data on over $6.17 billion trade deficit for July-August 2018 invited mid-session pressure,” Mehanti said.

“Upbeat data on remittances for July-August 2018, government avowal on commitments over China-Pakistan Economic Corridor (CPEC) projects, finance minister’s affirmation on likely announcement of new textile policy and Economic Coordination Committee’s (ECC) deferment of a raise in the gas tariff led to a positive close,” he said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index rose 0.19 percent or 75.48 points to close at 40,759.53 points, while its KSE-30 shares index edged up 0.20 percent or 40.01 points to end at 20,036.76 points.

Of 369 active scrips 219 advanced, 134 retreated, and 16 remained unchanged. The ready market volumes stood at 139.508 billion shares compared to a turnover of 112.552 billion shares in the previous session. Zeeshan Afzal, head of research at Insight Securities, said the PSX had a rollercoaster ride on Tuesday. “The benchmark index most probably gained momentum after Pakistan categorically denied a Financial Times report which quoted Abdul Razak Dawood, the advisor to Prime Minister on commerce, textiles, and industry as saying that the new government is considering renegotiating some agreements signed with Beijing under the One Belt, One Road initiative,” Afzal said.

He added that the news that a Japanese firm had managed to secure a license to set up and operate re-gasified liquefied natural gas (RLNG) terminal in the country made the exchange more attractive.

Cement shares were in the buying chart once again after Dawood’s rebuttal that he was misquoted and there were no plans to roll back the CPEC project. Analysts say this statement triggered buying in the market. The demand for the projects is likely to remain intact and sales of cement in the green column, an analyst said..

Muhammad Arbash, research analyst at Elixir Securities, said textile companies witnessed brisk trading after Finance Minister Asad Umar’s assurance of reducing energy tariff for textile companies. “Expectations of further depreciation and anticipation of textile package brought the sector in lime light. Nishat Mills, Gul Ahmed Textile Mills Limited, Nishat Chunian and Gadoon Textile Mills closed at their respective upper limits.

The highest gainers were Island Textile, up Rs63.75 to close at Rs1338.75/share, and Siemens Pakistan, up Rs18.87 to finish at Rs927.75/share.

Companies that booked highest losses were Bata Pakistan, down Rs19.99 to close at Rs1800.01/share, and Jubilee Life Insurance, down Rs19.50 to close at Rs630.50/share.

Unity Foods Limited recorded the highest volumes with a turnover of 11.104 million shares. The scrip gained Rs1.78 to close at Rs41.01/share.

The lowest volumes were witnessed in Bank Al-Habib, recording a turnover of 11.148 million shares, the scrip lost Rs1.02 to end at Rs79.90/share.