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Stocks stay gaining course steered by energy shares


July 7, 2020

Stocks on Monday stayed the gaining course they set last week, steered by energy shares, with active support from institutions, as owing to a lower interest rate, the share market has started blipping brighter on their radars compared to fixed income avenues, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.43 percent or 151.39 points to close at 35,202.77 points level, while KSE-30 edged up 0.29 percent or 44.14 points to end at 15,246.96 points level.

Brokerage Topline Securities, in a note said, “The market opened on a positive note making an intraday high of 187 points”. It said the positive momentum was mostly due to the E&P (exploration and production) sector as it closed 1 percent higher; meanwhile, HUBC closed 2.55 percent lower as it was excluded from KMI-30 Index.

Of 380 active scrips, 257 advanced, 94 retreated, and 29 remained unchanged. Traded volume and value increased significantly by 89 percent and 66 percent on day-on-day basis to 331 million shares and Rs11.16 billion respectively.

Analyst Ahsan Mehanti from Arif Habib Corporation, said, “Index closed in the positive column amid higher trades in the earnings season amid a bull-run in global equities and surging global crude oil prices”.

The ECC approval for hike in power tariff, upbeat trade deficit numbers, 19 percent increase in OMCs (oil marketing companies) sales for FY20, and rupee stability, amid $2 billion debt relief from G20, contributed to higher close, Mehanti added.

Fahad Rauf, deputy head of research at Ismail Iqbal Securities, said, “Stocks sustained gains on fresh inflows as lower interest rates have made equity asset class more attractive than others, especially fixed income”.

“We expect fresh flows from financial institutions including insurance companies, mutual funds and even banks,” Rauf said adding, “Selective fertiliser items were on the buying chart following the ECC decision to give subsidy on RLNG, to provide cheaper fertilizer to farmers.

Tahir Abbas, director research at Arif Habib Limited, said, “The market maintained the upward journey that started last week, where major concentration was witnessed in cyclical and chemical stocks”.

Investor participation was also witnessed in the cement sector on part of the government’s plan to start construction sector along with couple of major water reservoir projects, likely to help improve cement sales going forward, Tahir added.

Faisal Shaji, strategist at Standard Capital, said, "The market participation has been enormous with index testing resistance of 35,253 points level”. “Investors interest is likely to remain focused in cements, long steel, trucks etc, given developments initiated by the government on dams,” Shaji said.

Rafhan Maize, gaining Rs240 to close at Rs7,190/share, and Sanofi-Aventis, up Rs59.99 to finish at Rs924.99/share, emerged as the top gainers, while Sapphire Textile, down Rs58.99 to close at Rs851.00/share, and Nestle Pakistan, losing Rs45.00 to close at Rs6845.00/share, turned out to be the main losers.

TRG Pakistan Limited posted the highest volumes with 37.708 million shares and gained Rs0.97 to end at Rs34.21/share, while Hascol Petrol’s turnover was the lowest with 6.304 million shares and it gained Rs0.05 to end at Rs13.76/share.