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Market watch: Pakistan stocks recover, index ends higher

KARACHI: Pakistan stocks posted a gradual recovery to end positive after the benchmark-100 index lost as much as 760 points in early-morning trading.

In an almost knee-jerk reaction to Donald Trump’s lead in the race to the US presidency, the KSE-100 Index lost 1.8% within the first hour, as foreign investors continued to offload equities.

But nerves settled soon enough. Local investors got in the game on the back of positive developments as the surprise over Trump’s victory wore off. They took advantage to buy at low rates, helping the market regain lost ground.

At close on Wednesday, the Pakistan Stock Exchange’s benchmark KSE 100-share index finished with a gain of 0.21% or 89.72 points to end at 42,203.63

Ovais Ahsan, head of international desk at JS Global Capital, said he sees a neutral to positive impact of Trump’s victory on the Pakistan stock market.

US economic policies for Pakistan would remain “more or less the same,” he said, adding that Trump’s win would not make for a very “meaningful impact on the Pakistan Stock Exchange.”

He said selling by foreign investors was part of usual business. Net foreign selling amounted to Rs980 million on Wednesday, according to data maintained by the National Clearing Company of Pakistan Limited.

Meanwhile, Elixir Securities Ali Raza said equities closed positive after recovering from the morning knee-jerk selloff as Trump’s surprise victory in US elections rattled financial markets in the world over.

“Market opened gap down with investors understandably resorted to panic selling as they tracked slump in global crude prices and regional markets. The benchmark KSE-100 index tumbled as much as 1.8% in the morning and thereafter traded highly volatile and witnessed wild swings until mid-day. It was followed by impressive recovery off the lows as regional markets pared losses while strong local liquidity in index names also supported wider market and pushed KSE-100 index in green zone at close.

“We expect KSE-100 index to consolidate gains above 42K and trade in a range of 300-400 points while caution is advised in textile, automobiles, exploration and production sector (E&Ps). Investors from here on will closely track developments on international front as Trump, the 45th US president, announces his broad policy objectives in the coming days.”

JS Global analyst Nabeel Haroon said the cement sector extended its previous day gain on the back of encouraging cement dispatch numbers released by APCMA for October 2016. “Fauji Cement (FCCL +2.28%) and Kohat Cement (KOHC +1.92%) were top performers of the aforementioned sector.

“Oil & Gas Dev Company (OGDC -1.41%), Pakistan Oilfields (POL -0.98%) and Pakistan Petroleum (PPL -0.64%) in the E&P sector lost value to close in the red zone as crude oil prices remained largely under pressure during the trading hours.

“Fauji Fertilizer (FFBL +2.70%) gained to close in the green zone for the third consecutive day on the back of EOGM announcement by the company in which a resolution to acquire FFBL Power Company Limited (FPCL) was announced.”

Trade volumes rose to 553 million shares compared with Tuesday’s tally of 481 million. Shares of 422 companies were traded. At the end of the day, 185 stocks closed higher, 216 declined while 21 remained unchanged. The value of shares traded during the day was Rs21.04 billion.

Bank of Punjab was the volume leader with 109 million shares, losing Rs0.85 to finish at Rs20.37. It was followed by Telecard Limited with 43.6 million shares, gaining Rs0.36 to close at Rs5.25 and Sui South Gas with 30.4 million shares, gaining Rs1.17 to close at Rs46.85.

Courtesy : Express Tribune



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