Stocks end higher, driven by MSCI decision

Stocks closed up on Wednesday, reflecting largely positive sentiment in the market, after index provider MSCI announced overnight it would maintain a status quo for Pakistan’s weightage in the emerging market index, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.27 percent or 90.02 points to close at 33,693.04 points level. KSE-30 shares index followed suit with a high of 0.03 percent or 3.80 points to end at 14,796.73 points level.

Of 346 active scrips, 152 moved up, 174 retreated, and 20 remained unchanged. The ready market volumes stood at 219.201 million shares, as compared with the turnover of 224.534 million shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said stocks closed higher on investor expectation for a policy cut on May 15 and MSCI decision to maintain Pakistan’s weight in the Emerging Market Index.

Mehanti said investor concerns over LSM (large scale manufacturing) decline during July-April 2020, surging government debt, and unsettled circular debt invited mid-session pressure.

“Rescheduling of foreign loans approval from G20 and surging global crude oil prices played a catalytic role in the positive close at PSX,” he added.

Overall, banks, E&Ps, and cements led the index gains, cumulatively adding 117 points. All the auto sector shares were in the red, ranging from Re0.50 to Rs10.50/share following the data released by the Pakistan Automotive Association, which reported zero sales due to lockdown in April.

Shahab Farooq, director research at Next Capital, said, the market was although volatile, the KSE-100 remained in the positive territory throughout the day with decent trading volumes.

“Pakistan managed to retain its slot in the MSCI Emerging Markets Index despite non-compliances, and that resulted in price gains in the shares of HBL and MCB in particular,” Farooq added.

Expectations of another cut in interest rates on Friday also fuelled positive sentiments in stocks of leveraged companies.

Salman Ahmad, head of institutional sales at Aba Ali Habib, said market showed stability owing to MSCI decision maintaining Pakistan’s status; however, if some deletions were announced, the market might have shown some declining trend.

Moreover, since the announcement of commencement of Diamer Basha dam, cement and steel sectors have been quite, Ahmad added.

Sateesh Balani, director research at Ismail Iqbal Securities, said equities sustained positive momentum, as Pakistan retained status in MSCI EM Index.

However, in MSCI small caps, Mari Petroleum, up 2.43 percent, and Pakistan Petroleum Limited (PPL), up 2.03 percent, were added, while Nishat Mills, down 2.63 percent, and Sui Northern Gas, down 6.90 percent, were excluded from the index heavy weights.

The top gainers were Rafhan Maize, up Rs90.00 to close at Rs7,000.00/share, and Sanofi-Aventis, up Rs28.15 to finish at Rs763.15/share.

Unilever Foods, down Rs589.00 to close at Rs9,011.00/share, and Indus Dyeing, down Rs46.06 to close

at Rs570.00/share, were the main losers.

Maple Leaf recorded the highest volumes with a turnover of 23.239 million shares. Its scrip lost Re0.27 to end at Rs27.14/share.

The lowest volumes were witnessed in Unity Foods Limited, recording a turnover of 5.820 million shares, whereas its scrip lost Re0.07 to end at Rs12.78/share.