Market up on support from foreign funds, financial institutions

The capital market on Wednesday for the second consecutive session closed on a positive note following active support from foreign fund houses and financial institutions, placing fresh deals in investment and choice E&P scrips, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks recovered sharply, led by selected scrips across the board on investor speculation in the earnings season amid strong quarterly financial results in the energy sector.”

Improving investor confidence after finance minister reassurances on Financial Action Task Force (FATF) action plan implementation by February 2020, foreign inflows and upbeat data on textile exports for September 2019 played a catalytic role in the bullish close, Mehanti added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.73 percent or 240.73 points to close at 33,439.69 points level. KSE-30 shares index followed suit with a high of 0.83 percent or 128.88 points to end at 15,616.11 points level.

Of 351 active scrips, 205 moved up, 132 retreated, and 14 remained unchanged. The ready market volumes stood at 116.944 million shares, as compared with the turnover of 83.612 million shares in the previous session. Madiha Javed, head of research at Ismail Iqbal Securities, said, “The KSE-100 index remained positive throughout the session ahead of the T-bill auction later in the day, where yields may decline further. Political uncertainty is again in the news with JUI-F staging a sit-in in Islamabad which the government has allowed, she said.

A leading analyst said that stabilisation in the currency rate has prompted buying from foreign fund houses and for the last three sessions, overseas companies have been the net buyers of equities. Several companies have recently shown good performance and financial results witnessed soundness despite slower economic growth, he added.

Salman Ahmad, head of institutional sales at Aba Ali Habib, said, “The market has responded well on grounds that crude oil price gained sharply, which helped local stocks move northwards.”

The views of State Bank Governor Reza Baqir that interest rate would not go down immediately and would be addressed following inflation numbers, and that banks would gain sharply in the next quarter ending December 31, 2019 might also show appreciable improvement, he said.

Some concerns hang over the minds of investors about the border tension, roll over week and slower growth horizon at a pace of around 2.4 percent in the current fiscal year, Salman added.

A trader pointed out that one of the key factors behind surge in the market was hope that the sit-in from the religious party might convert into a public gathering, and after delivering the protest and chanting slogans the day would be calm.

The highest gainers were Nestle Pakistan, up Rs310.00 close at Rs6,610.00/share, and Rafhan Maize, up Rs200.00 to finish at Rs7,400.00/share.

Companies that booked highest losses were Bhanero Textile, down Rs45.74 to close at Rs869.25/share, and Pakistan Services, down Rs36.79 to close at Rs991.31/share.

WorldCall Telecom recorded the highest volumes with a turnover of 12.558 billion shares. The scrip lost Rs0.01 to end at Rs1.01/share.

The lowest volumes were witnessed in Maple Leaf, recording a turnover of 2.932 million shares, whereas the scrip lost Rs0.05 to end at Rs15.55/share.