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January 28, 2021

Stocks cruise in result rally amid economic hopes

Business

January 28, 2021

Stocks headed further north on Wednesday in result season rally with oil sector, especially refineries, blazing the trail amid sentimental support from IMF’s economic growth projections, dealers said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 shares index gained 0.37 percent or 170.75 points to close at 46,458.13 points. Volumes increased to 610.940 million shares, from 603.240 million shares on Tuesday. KSE-30 shares index also hit a high 0.58 percent or 111.27 points to end at 19,370.27 points level.

Brokerage Topline Securities in its daily market review said higher forecast for global economic growth in 2021 by IMF and ongoing smooth rollover week strengthened investor sentiment with the market making an intraday high of 410 points.

TRG contributed 80 points to the index as the current future position was rolled over easily, the brokerage said adding MARI petroleum closed 4.25 percent higher after notifying the exchange about provisional award of 4 new exploration blocks -two blocks as an operator and another two as joint venture partner with other energy companies.

Yawar-uz-Zaman, head of research at Pearl Securities said the market continued its upward ride on the third consecutive day of the rollover week.

Technology and refinery sector kept the momentum going after better results by refineries and valuation play in the IT sector, Zaman said.

“IMF’s projection that Pakistan’s GDP growth rate may hover around 1.5 percent in this fiscal and 4 percent in the next (FY22) also boosted investor confidence,” Zaman added.

Muhammad Saeed Khalid, head of research at Shajar Capital said the stock market remained bullish mainly because of the corporate results announcements.

Investors remained bullish in the oil scrips mainly on fears of a likely military conflict between Israel and Iran, while higher growth projections published by the IMF also helped, he said.

“Aggressively buying was seen in the oil scrips following the news regarding a likely increase in dealers’ margins, amid expectations of higher OMCs sales volume to be announced later this week.”

“Pharmaceutical sector remained in the limelight after reports that AGP has agreed to buy vaccine from Russia,” Khalid added.

Of 421 active scrips, 224 increased, 187 lost, and 10 remained unchanged.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities said the resumption of financial results set the share prices on fire where refineries led the gains.

Despite the rollover week, volume has been higher and index was recording gains owing to some outstanding corporate results for the quarter, Ahmad added.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks closed higher amid higher trades in the futures rollover week at PSX, led by oil, banking, and cements scrips on robust financial results.

Firm SBP policy on key policy rate, higher global crude oil prices, strong oil and banking sector payouts, and government extension of construction sector package contributed to the bullish close, Mehanti added.

The top gainers of the day were Sapphire Textile, up Rs76.43 to close at Rs1,100/share, and Phillip Morris Pakistan, up Rs60.20 to finish at Rs1,508.20/share.

Colgate Palmolive, down Rs120 to close at Rs3055/share, and Gatron Industries, losing Rs45 to close at Rs555/share, were the worst losers.

Azgard Nine led volumes with 40.212 million shares. The scrip gained Rs0.09 to end at Rs32.11/share. AVANCEON Limited posted the lowest turnover with 15,150 million shares, gaining Rs4.14 to end at Rs108.24/share.