Stocks gain 2.13pc on Moody’s review

Stocks on Monday blasted through the 40,000 points’ barrier after 10 months, powered by an upgrade in Pakistan’s economic outlook by Moody’s Investor Services, while turnover also surged to record, dealers said.

Pakistan stock exchange (PSX) KSE-100 shares index jumped 2.13 percent or 836.57 points to close at 40,124.22 points, while KSE-30 climbed 2.1 percent or 377.62 points to close at 18,387.87 points.

Ahsan Mehanti at Arif Habib Corp said stocks closed record bullish amid higher trades after reports Moody’s had upgraded Pakistan outlook to stable from negative.

“Speculations on improving current account surplus in November 2019, government’s commitments over privatisation of state-owned-enterprises and its resolve to settle circular debt crises amid surging power tariffs, were key factors that kept the gains coming in throughout the day,” Mehanti said.

As many as 409 scrips were active of which 304 advanced, 89 declined, and 16 remained unchanged.

The ready market volumes swelled to 30-month high of 557.394 million shares, compared to 431.853 million, a day earlier.

An analyst at Arif Habib Limited said market finally crossed 40,000 level, which was last seen in February 2019. “Moody’s has upgraded Pakistan’s outlook from negative to stable and affirmed B3 rating, encouraging investors to continue the bull-run that started from 36,000 points’ level,” the analyst said.

Topline Securities in a note said, “Positive momentum continued given improvement in macroeconomic indicators such as increase in goods export by 9.6 percent which led to a decline of 34.4 percent in trade deficit for month of November 2019”. Furthermore, the brokerage said investor sentiment strengthened after Moody's upgraded country’s economic outlook, citing balance of payments dynamics were likely to improve based on policy adjustments and currency flexibility. “The outlook was revised downwards in June 2019,” the brokerage said.

Bata Pakistan, up Rs92.90 to close at Rs1,951.01/share, and Nestle Pakistan, up Rs92.05 to close at Rs6,490/share, were the highest gainers of the day. Colgate Palmolive, down Rs53 to close at Rs1,980/share, and Highnoon Laboratories, down Rs23.42 to end at Rs531.67/share, were among the top losers.

Banking sector continued upbeat performance followed by cement and power. Among the main contributors were: Habib Bank Limited, up 4.9 percent, MCB Bank up 4.99 percent, United Bank, up 4.99 percent, Bank Al Habib, up 4.92 percent, and Hub Power Company, up 2.61 percent. On the other hand, OGDC, down 2.61 percent, Pakistan Petroleum, down 1.34 percent, Pakistan Oilfields, down 1.58 percent, and Millat Tractors, down 2.1 percent, turned out to be the top index draggers.

Arsalan Soomro, managing director KASB Securities, noted the benchmark index had breached the 40,000 points level once again. “We are heading for stability. The next pit stop is growth i.e. exports, import substitution, and job creating foreign investment. Stability has come at a high cost of inflation, private sector losses, unemployment and loss of purchasing power. Let's hope it doesn't go to waste.”

Bank of Punjab, with a turnover of 74.92 million shares, emerged as the volume leader, while it gained 78 paisas to close at Rs12.4/share. K-Electric was second with 40.85 million shares, growing by 39 paisas to close at Rs4.59/share. Unity Foods was third highest volume-maker with 37.7 million shares and it finished at Rs13.21/share with a gain of 13 paisas.