Stocks cross 41,000 points’ mark as economic hopes ride high

Stocks on Monday gained for sixth session in a row to break through 41,000 points’ barrier on reports that more financial assistance from Asia’s largest economy is about to reach the strongrooms of country’s central bank, amid good earnings’ expectations, dealers said.

Topline Securities in its market review said investors were buoyant as over the possibility of a further $2.5 billion deposit in State Bank of Pakistan from China to bolster the country’s wobbly foreign exchange reserves.

“Saudi Crown Prince, Mohammad Bin Salman’s upcoming visit that is seen to be investment-intensive also added to the positive sentiments,” the brokerage said. Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 1.22 percent or 501.68 points to close at 41,614.39 points, whereas KSE-30 shares index followed suit with a high of 1.33 percent or 261.77 points to end at 19,999.54 points. Of 374 active scrips, 251 moved up, 105 retreated, and 18 remained unchanged. The ready market volumes stood at 254.108 billion shares, as compared with the turnover of 228.920 million shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said stocks closed higher led by selected scrips across the board as investors weighed surging global crude oil prices and strong earnings outlook. “Easing external account pressures, higher foreign exchange reserves, lower than expected CPI Inflation data for Jan 2019 and Standard & Poor’s affirmation on short-term sovereign rating at B and long-term stable outlook led to a bullish close,” Mehanti added. Salman Ahmad, director institutional sales at Aba Ali Habib, said positive developments especially news from China that Pakistan was soon to get financial assistance of $2.5 billion helped improve investor’s morale.

“The Saudi crown prince is expected to arrive soon with a promise of some $19 billion investment in Pakistan, which further cheered the mood,” Salman added.

Cement sector witnessed a fresh buying spree with all the companies landing in the green column, after the government’s decision to start construction work on Gwadar airport from April. The country’s construction sector emerged as the leading recipient of the foreign direct investment during the first six months of current fiscal year with inflows concentrated in the China-Pakistan Economic Corridor (CPEC) related projects.

Beside cement companies, oil and gas companies also pushed up the overall index on back of fresh gains recorded in crude oil price. Moreover, the companies recorded gains on expectation that the financial results for the six months would be better compared to last six months of 2017 as the average crude oil price would be much higher. S&P downgraded Pakistan rating to B (-) minus, citing that it felt the country’s economic outlook as well as its external position deteriorated, where prospects for a rapid recovery in fiscal and external settings are now diminished.

The highest gainers were Nestle Pakistan, up Rs390.00 to close at Rs8900.00/share, and Unilever Foods, up Rs349.99 to finish at Rs7349.99/share. Companies that booked highest losses were Phillip Morris Pakistan, down Rs170.44 to close at Rs3238.36/share, and Island Textile down Rs85.00 to close at Rs1615.00/share.

Bank of Punjab recorded the highest volumes with a turnover of 19.840 billion shares. The bank’s scrip gained Rs0.25 to close at Rs13.83/share. The lowest volumes were witnessed in Azgard Nine recording a turnover of 12.009 billion shares, whereas the scrip lost Rs0.08 to end at Rs15.30/share.