Stocks make a strapping comeback on value-hunting

Stocks on Friday bounced off, recovering over two percent, on value-hunting with cement sector coming back into limelight amid strong institutional interest in blue chips, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index gained 2.03 percent or 636.92 points to close at 32,070.81 points, whereas KSE-30 hit a high of 2.31 percent or 338.86 points to finish at 14,998.07 points.

A total of 344 names were bought and sold toady today; however, a breakup shows 249 gained, 76 lost, and 19 did not change. Turnover increased to 135.161 million shares, compared to 124.475 million on Thursday. Madiha Javed, head of research at Ismail Iqbal Securities, said, “The main index closed in green as investors resorted to value hunting”.

World Bank's country director’s kudos for reforms, collectively undertaken by the federal, Sindh, and Punjab governments, which placed Pakistan among the top 20 global reformers in Ease of Doing Business, were taken positively, Javed said. “Furthermore, investor participation also improved in today’s session,” she added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “Active buying from financial institutions and end of the rollover week strengthened investors’ mood”. Nearly all the cement shares ended up in the positive column, while some of them closed on their upper circuits, Ahmad said.

“Cement stocks drew strength from the rumors that the factories are expected to raise the price of the commodity by next week,” he said. The market since morning was in the positive column as buying was seen at all the corners, especially from the financial institutions.

Today’s strong close with index hovering around 32,000 points signaled the market has potential to go further up. A leading trader said a continuously strengthening rupee (against the dollar) also helped improve confidence of foreign investors. They have been keen buyers of government securities offering higher yields. However, the leading economic indicators that have started showing early signs of stabilisation, especially the current account deficit that shrank over the previous year, lifted up the sentiment at the bourse.

Rupee stabilised and appreciated around 2 percent against the dollar between July and August; trading at an average of 159 to the dollar in July, compared with 156/dollar last month.

Foreign direct investment into Pakistan fell 58.4 percent to $156.7 million in the period under review. An analyst said some of the high-net worth individuals were still out of the market because of the revenue collection numbers revealed for the quarter ended September 30, 2019. Expected shortfall, which is in excess of Rs100 billion, continues to remain the cause of concern as it would increase on borrowing, creating pressure on the external front.

The highest gainers were Rafhan Maize, up Rs290 close at Rs6,090/share, and Mari Petroleum, up Rs31.45 to finish at Rs907.19/share. Companies that booked highest losses were Khyber Textile, down Rs14.91 to close at Rs283.33/share, and Wyeth Pakistan Limited, down Rs12.25 to close at Rs615/share.

K-Electric Limited recorded the highest volumes with a turnover of 17.578 billion shares, gaining Rs0.11 to end at Rs3.63/share. Amreli Steel posted a turnover of 3.266 million shares, which was lowest of the day; however, the scrip gained Rs0.23 to end at Rs22.24/share.