Stocks end up on institutional buying, boosting blue chips

Stocks on Tuesday closed on a higher note as institutions zoomed in on cement sector amid expectations of further monetary softening, while signs of recovery in global markets also gave investors a sentimental leg-up, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.74 percent or 238.82 points to close at 32,553.39 points, while KSE-30 ended 0.67 percent or 95.00 points stronger to end at 14,281.23 points level.

Topline Securities in a market note said, “Cement-makers led the gains on the noise that per bag price of the key building material is unchanged and government has not taken any measures against cement manufacturers”.

The brokerage further said despite a decline in international oil prices (where WTI contracts are trading below $11/barrel), E&P (exploration and production) sector closed on a flat note (down by -0.06 percent).

Of 325 active scrips, 174 moved up, 129 down, and 22 ended intert. The ready market volumes improved to 159.413 million shares, compared to 122.282 million shares traded in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks showed recovery led by selected cement, banking and fertiliser scrips as investor weighed positive outcome of SBP (State Bank of Pakistan) measures for rate cut and refinance schemes”.

“Pressure remained in oil scrips amid slump in global crude oil prices.”

Mehanti added that G20 creditors’ deferment of debt payments and receipt of $1.4 billion from IMF (International Monetary Fund) as economic support amid novel coronavirus outbreak and rupee stability against dollar catalysed a positive close.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The market recorded healthy gains on back of buying from financial institutions”. With the inflation numbers to be released soon, the market consensus remains that the central bank’s policy rate is likely to go lower than 9 percent down the line, Ahmad further said.

“Lower inflation numbers hint at further easing in monetary policy stance, expected to be announced anytime in May,” he said.

Ahmad said the market in the coming sessions was likely to remain mixed and might see-saw, owing to uncertainty arising from the pandemic that had disturbed the overall pattern of economic movement.

Faizan Munshey, head of foreign institutional sales at Next Capital, said, “Stock market traded positive throughout the trading session amid recovery in international equity markets as governments around the globe started reopening their economies”.

A leading analyst viewed that the market got support from the government’s announcement waiving electricity bills for commercial and industrial users for three months. He said this would help companies lower their costs, improving their margins.

Moreover, the exemption of sales tax on services of property developers and promoters in the federal capital was also cheered as a positive sign for the construction industry. This helped turned cement sector to attract fresh buying.

Today’s the top gainers were Unilever Foods, up Rs333.33 to close at Rs8,500/share, and Nestle Pakistan that gained Rs232 to finish at Rs5,780/share.

Sapphire Fibre, losing Rs51 to close at Rs651/share, and Pakistan Tobacco, down Rs43.33 to close at Rs1,636.34/share, turned out to be the main losers.

Maple Leaf Cement led volumes with 36.232 million shares and gained Rs0.77 to end at Rs26.72/share. The lowest volumes were witnessed in Pakistan Elektron that recorded 3.144 million shares, ending at Rs22.44/share with a gain of Rs0.05.