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Stocks up on energy shares; NCC meeting in focus


May 30, 2020

Stocks on Friday rose on a rally in energy shares and cherry-picking by foreign funds, while investors held on to caution ahead of a meeting that will decide the intensity of COVID-19 lockdown, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.70 percent or 235.81 points to close at 33,931.23 points level. KSE-30 shares index followed suit with a high of 0.65 percent or 94.50 points to end at 14,743.11 points level.

National Coordination Committee (NCC) is scheduled to meet on May 31 to finalise the country’s anti-coronavirus response strategy for the coming month and deliberate on extending or removing the lockdown restrictions in place right now.

Brokerage Topline Securities in its market review said, “Index heavyweight exploration and production sector provided major support to the market as it closed 1.44 percent higher”. Wednesday’s auction of Pakistan Investment Bonds auction that fetched the government Rs169 billion at yields lower than previous auction also provided stimulus to the market, the brokerage said.

Of 341 active scrips, 191 gained, 131 ended lower, and 19 remained unchanged. The ready market volumes improved to 233.020 million shares, as compared to 194.742 million in the previous session.

Tahir Abbas, Head of Research at brokerage Arif Habib Limited, said, "The market was upbeat on buzz that the government is expected to announce incentive-laden budget to revive the economy in the aftermath of COVID-19 pandemic which crippled the industrial output”.

“There is a likelihood of a number of incentives including reduction in sales tax and custom, regulatory, and federal excise duties due to shrinking cost of the doing business, which kept several sectors such as cement, steel, pharmaceutical and other allied sectors in the lime light,” Abbas said.

Faizan Munshey, head of foreign institutional sales at Next Capital, said, “The stock market closed with gains after the futures rollover was settled and in response to recent gains in international markets". “High volumes were witnessed in index heavyweight stocks amid MSCI rebalancing,” Munshey said.

Saad Rafi, head of equity sales at Al-Habib Capital Markets, said, “Despite short trading hours, volumes were quite decent and individuals and high net-worth were seen indulging in selected buying”.

Rafi said before the end some profit-taking emerged because of the weekend consideration, while all eyes were set on the May 31 meeting that would decide the fate of lockdown.

“The market’s movement next week will mainly depend upon the government’s decision on further easing or tightening of the lockdown,” he said.

Rafi added that cement and E&P (exploration and production) gathered momentum on the back of expected increase in cement sales before the close of the fiscal year as most of the ongoing projects were expected to speed up buying before the lapse of budget allocations.

Unilever Foods, up Rs59 to close at Rs9711.00/share, and Sapphire Fibre, up Rs51.03 to finish at Rs765.03/share were the top gainers of the day, while, Nestle Pakistan, down Rs256.67 to close at Rs6873.33/share, and Rafhan Maize, losing Rs150 to close at Rs7199.00/share, were the main losers. Unity Foods Limited recorded the highest volumes with 25.846 million shares and gained Rs0.17 to end at Rs13.45/share. Oil & Gas Development Company’s turnover was lowest with 5.937 million traded shares, while it gained Rs3.69 to end at Rs114.60/share.