OMCs lift stocks betting on POL price hike

Stocks on Monday got off to a good start in mixed trade led by oil marketing companies, betting on a likely hike in petroleum products’ prices and an upward revision of margins, amid rising international crude, and a mostly discounted political noise, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.64 percent or 261.73 points to close at 41,068.82 points. Turnover decreased to 388.554 million shares, as compared to 397.792 million shares in the previous session on Friday. KSE-30 also grew stronger by 0.71 percent or 121.69 points to end at 17,281.51 points.

Analysts at Topline Securities in a note said, equities started the week on a positive note as investors shrugged off political noise pertaining to the opposition public rally in Multan, while a lower inflation expectation for November buoyed sentiment at the bourse.

“Major positive contribution came in from TRG, PSO, MCB, UBL, and LUCK, which cumulatively added around 151 points to the benchmark index,” the brokerage said.

Muhammad Saeed Khalid, head of research at Shajar Capital, said the market remained mixed during the day, marking an intra-day high of 308 points to close just above 41,000 points.

“Investors remained bullish on petroleum stocks as a hike in POL (petroleum, oil, and lubricant) products’ prices is on cards in December 2020,” he said.

Investors also showed remarkable activity in the oil stocks as crude oil prices surged above $48/bbl in the international markets, while heavy buying was seen in technology stocks ahead of November 2020 trade numbers, Khalid added.

Trading activity was recorded in 368 active scrips, of which 230 increased, 122 lost, and 16 remained unchanged.

Muhammad Jawad Vohra at BMA Trading Desk said, “Since the market has been continuously trading in a narrow range due to lack of interest, the participation will improve once the risk of the pandemic subsides”.

“We prefer banks, cement, fertiliser, and conglomerates to capitalise on attractive valuation.”

“OMC sector showed good performance and PSO’s stock price jumped 4.27 percent in anticipation of final approval of margin increment of fuel products from the government,” Vohra added.

Faizan Munshey, associate director at KASB Securities, said equities closed higher despite international markets’ sluggishness and oil prices taking a pause after vaccine-driven rally.

“The benchmark index closed above the psychological level of 41,000, which is a positive sign for the market sentiment,” Munshey added.

Ahsan Mehanti from Arif Habib Corporation, said, stocks closed bullish led by selected scrips across the board as investor weighed higher global crude oil prices, surging textile, cement exports, and speculations on likely subdued CPI inflation for November.

“$100 million receipt in the Roshan Pakistan digital accounts supporting capital markets and reports of likely resolve to circular debt crises amid SOEs selloff boosted the buying sentiment,” Mehanti added.

Nestle Pakistan, gaining Rs59.99 to close at Rs6,589.99/share, and Wyeth Pakistan Limited, strengthening by Rs32.75 to finish at Rs1140/share, ended up as the top gainers.

Island Textile, losisng Rs119 to close at Rs1,481/share, and Pakistan Tobacco, shedding Rs40 to close at Rs1,500/share, were the main losers.

With 88,662 million shares, Hum Network was on the top of the volumes chart. The media stock lost Rs0.65 to end at Rs6.15/share. Hascol Petrol recorded thinnest trade with 8.109 million shares, but gained Rs0.26 to end at Rs14.46/share.