Stocks dodge red by banking on eleventh-hour cement spike

Stocks on Wednesday subdued in jerky trade, saved from ending up in red by an eleventh-hour cement sector rally, spurred solid sales growth numbers, amid speculations the price of the key construction material is in for a hike soon, dealers said.

The KSE-100 Shares Index, the benchmark of Pakistan Stock Exchange’s (PSX) performance, ticked up 0.34 percent or by 109.03 points to close at 32,363.35 points, while KSE-30 also gained a marginal 0.40 percent or 60.43 points to wind up at 15,167.88 points.

Of 367 active scrips, 219 moved up, 132 down, and 16 remained unmoved. The volumes recorded at 181.357 million shares mirrored yesterday’s turnover of 180.728 million shares.

Madiha Javed, head of research at Ismail Iqbal Securities, said, “The benchmark index remained choppy throughout the session but eleventh hours momentum helped it to close on a positive note”.

Investors are keenly waiting for a favorable decision from FATF (Financial Action Task Force) regarding Pakistan where an exit from the money laundering and terror financing watchdog’s grey list would prove positive for economy, Javed said.

“Commercial banks and cement sector turned out to be the major contributors by cumulatively adding 146 points to the index,” she added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said the market was up because of support from domestic as well as foreign financial institutions.

Moreover, Ahmad said today whispers were doing the rounds the interest rate was likely to see a cut soon as the secondary market had shown a downward trend in the long-term bonds yields.

“With stability in the foreign currency market and some of the key economic numbers showing improvement, the market is putting up resistance at around 32,000 points level, which bodes well for the market,” he said.

Rally in the cement sector helped market close on a positive note after Pakistan Cement Manufacturers Association statistics presented cement sales in September showed a rise of 11.51 percent to 4.270 million tons in September 2019 against 3.829 million tons dispatched in same month a year ago. Cement companies also gained on rumors that soon the cartel would regroup and the prices would go up across the country.

Rise in sales and price of cement would help propel earnings of the companies during quarter starting from October 1, 2019, said an analyst.

Topline in its review said oil sales during 1QFY20 continued its downward trend for 8th consecutive quarter and posted fall of 13 percent YoY, where major decline was witnessed in Furnace Oil and His Speed Diesel (HSD) to the extent of 29 percent and 16 percent YoY, respectively.

The highest gainers were Phillip Morris Pakistan, up Rs130.58 close at Rs3,199.99/share, and Bata Pakistan, up by Rs62.25 to finish at Rs1,307.25/share.

The highest losers were Colgate Palmolive, down Rs57.49 to close at Rs1,942.51/share, and Pakistan Tobacco, down Rs15 to close at Rs2,400/share.

Maple Leaf’s volumes turned out to be the highest 16.295 million shares, whereas the scrip put on Rs0.84 to end at Rs16.48/share.

Lotte Chemical had the lowest turnover at 4.049 million shares; however, the scrip managed to gain Rs0.2 to end at Rs14.13/share.