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April 15, 2021

Stocks gain as economy shows green shoots


April 15, 2021

Stocks on Wednesday pressed ahead counting on upbeat economic numbers amid robust corporate earnings hopes, dealers said.

Pakistan stock exchange (PSX) KSE-100 shares index gained 0.58 percent or 262.65 points to close at 45,311.22 points. Volumes reduced to 341.88 million shares from 473.433 million in the last trading session.

Topline Securities in a note said encouraging large-scale manufacturing and auto sales numbers and decline in Pakistan Investment Bonds cutoff yields garnered investors interest, which led the market to make an intraday high of 298 points.

TRG, FFC and HBL emerged as the major contributors by cumulatively adding 69 points to index, the brokerage said.

Ahsan Mehanti at Arif Habib Corp said stocks closed bullish led by autos, oil, and cement amid 31 percent surge in car sales and higher large scale manufacturing growth.

The government budget target for growth rate of 4.2 percent for FY22, surge in global crude oil prices and $2.7 billion record remittances in March 2021 kept the PSX bullish, Mehanti added.

An analyst at Arif Habib Limited said first day of the holy month of fasting marked positive opening for the benchmark index with an overall increase of 299 points during the session.

Proximity to announcement of quarterly corporate results made investors take a positive view on the market, while buying was observed in cyclical sectors such as autos, cement and steel, the analyst said.

He added that oil and gas marketing sector saw Sui Northern Gas performing, besides refinery and technology stocks where Netsol Technologies hit its upper circuit.

KSE-30 Shares Index also gained 0.59 percent or 107.94 points to close at 18,544.38 points.

A A H Soomro at KASB Securities said market remained strong on first Ramzan as the Covid cases didn’t spike materially.

There was a political noise over the arrest of leader of Tehreek-e-Labaik Pakistan (TLP) that could have dampened the sentiment, he said, adding that however at the moment, there were no signs of panic in Pakistan yet.

“Investors seem to be relieved over the fact the government has readied growth plan for next year with GDP growing at 4.2 percent, tax collection at 11.2 percent of GDP, budget deficit at 6 percent, current account deficit at $4.7 billion and Public Sector Development at Rs 800 billion.

That shows government's resolve to keep spending higher and avoid primary surplus,” Soomro said.

Sales of automobiles remained robust in March reaffirming the growth stemming from low interest rate financing.

Similarly, interest was seen in cements and steels owing to higher PSDP allocation for the next year.

Sui Northern Gas Pipeline witnessed positivity as gas losses seemed to have been stemmed in Karak by the management, while technology sectors saw positivity in Netsol, Telecard and Pakistan Telecommunication.

Analysts expect the market to remain flattish to positive over next few days depending on virus infection rate and corporate profitability.

The top two gainers of the day were Sapphire Fiber, up Rs47.99 to close at Rs879.99/share, and AKD Capital, up Rs32.97 to close at Rs475.12/share.

The worst losers were Nestle Pakistan, down Rs40 to close at Rs5,810/share, and Gatron Industries, down Rs36.42 to end at Rs476/share.

First National Equities with a trade of 43.1 million shares led the volumes chart, followed by Media Times Limited with 20.2 million, and Ghani Global that saw its 19.47 million shares changing hands on Wednesday.