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November 26, 2020

Energy stocks rally; investors pin hopes on vaccine success


November 26, 2020

The capital market remained positive for the second consecutive session on Wednesday, making healthy gains in oil and gas stocks following sharp recovery in global crude oil prices, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.29 percent or 514.18 points to close at 40,377.84 points level, while volumes increased to 241.946 million shares, as compared with the turnover of 174.718 million shares in the previous session.

KSE-30 shares index followed suit with a high of 1.58 percent or 264.73 points to end at 17,016.38 points level.

Muhammad Saeed Khalid, head of research at Shajar Capital said, “Despite imposition of lockdowns in Karachi along with other cities of Pakistan, the market remained on the buying side where most of the investors accumulated in the pharma sector.”

Furthermore, crude oil prices recovered in the international market, where pricing surged to $45/bbl, which improved sentiments in the oil industry.

Oil marketing companies, exploration and production sector, and refineries performed better during the day, Khalid added.

Tahir Abbas, director research at Arif Habib said optimism was generated owing to arrival of

vaccines, which hints that

global markets might overcome the virus, generating economic activities.

Other factors which helped the bourse climb included rally in crude oil prices, which showed a jump of more than three percent, helping local oil and gas stocks to fare well.

Oil and gas exploration sector led the index gain as Oil and

Gas Development Company (OGDC), and Pakistan Petroleum Limited (PPL) were up seven percent.

Stocks including OGDC, PPL, Pakistan Oilfields Limited, Systems Limited and Engro led the index gains, cumulatively contributing 323 points, Abbas added.

Trading activity was recorded in 378 active scrips, of which 227 increased, 134 lost, and 17 remained unchanged.

Umair Naseer from BMA Sales said, “We anticipate banking sector and oil sector to continue rallying on back of expected year end dividends and higher oil prices.”

Faizan Munshey, associate director at KASB Securities said, “Equities opened higher and traded up throughout the day with oil stocks leading the gains as international oil traded at its highest level since March.”

Furthermore, the market grew optimistic on recent breakthroughs on a Covid-19 vaccine, which would possibly lead to a swift recovery in global energy demand next year, Munshey added.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks closed higher amid higher trades, as global equities and prices of crude oil surged.

SBP decision over status quo in the key policy rate announcement, reports of surging remittances, exports and rupee recovery played a catalytic role in the bullish close, Mehanti added.

Top gainers were Colgate Palmolive, gaining Rs50.00 to close at Rs2,850.00/share, and Mari Petroleum, up Rs47.03 to finish at Rs1,353.17/share.

Rafhan Maize, down Rs89.00 to close at Rs8,311.00/share, and Wyeth Pakistan Limited, losing Rs12.56 to close at Rs998.02/share, were the main losers.

With 28,573 million shares, Fauji Bin Qasim was on the top of the volumes chart. It lost Re0.89 to end at Rs23.58/share.

On the other hand, Lotte Chemical turnover with 6.245 million traded shares was at the bottom, and it gained Re0.83 to end at Rs12.62/share.