Buoyed by the rise in global crude prices and earnings announcements by some of the major players in the oil and gas sector, the Pakistan Stock Exchange’s (PSX) benchmark-100 index breached the 40,000-point level on Monday and managed to sustain its level over the psychological barrier for the first time.
The KSE-100 Index, a benchmark for stock performance on the PSX, powered past the 40,000 level on Friday, but last-hour profit-taking meant it finished below the coveted level.
KSE-100 index at all-time high as Pakistan upgraded to emerging markets status
However, Monday proved to be otherwise as positive sentiment over earnings announcements and increase in oil prices meant investors had little reason to be jittery. Profit-taking was limited to select stocks and was not enough to cause the index to move below the 40,000 level.
At close, the KSE-100 ended with an increase of 0.31% or 122.88 points to finish at 40,030.52. This is the highest ever closing for the KSE-100 Index.
Elixir Securities, in its report, said the exploration and production (E&P) sector led the way along with other stocks that weigh heavily on the KSE-100 Index.
“E&Ps were the major winners as they all opened gap up, tracking rise in global crude over the weekend. Pakistan Petroleum (PPL PA +1.6%) led the gains, while Oil and Gas Development Company (OGDC +1.3%) and Pakistan Oilfields (POL +1.3%) also supported the ride.
“Pakistan State Oil (PSO) closed flat after it announced earnings in line with estimates, while Attock Petroleum (APL) climbed +3.9% and traded most volumes since start of March after it announced earnings and pay-out that beat market estimates.
“Activity in other sectors remained fairly lean with notable financials closing mostly in the red on profit-taking and cements closing mixed on limited interest.
“Meanwhile, small and mid-cap plays dominated volumes chart with K-Electric (KEL -1.0%) once again leading,” said the report.
Pakistan upgraded to emerging markets status
“We expect earnings season to keep interest in wider market alive while flows will continue to guide the direction going forward,” remarked Elixir Securities analyst Ali Raza.
JS Global analyst Ahmed Saeed Khan said sentiments remained positive at large.
“The Oil and Gas sector (OGDC +1.34%, PPL +1.63%) gained on the back of uptick in global crude oil prices, which are close to their three-week high on speculation that oil producers will agree to an output freeze in an informal OPEC’s meeting in the upcoming month.
“Cement sector sustained its upward journey on the back expectations of strong FY16 results. KOHC (+1.97%) and DGKC (+0.81%) were top performers from the sector.
“On the other hand, the banking sector remained under pressure, where most large banks (HBL -0.91%, MCB -0.67%) remained consistently in the red zone.”
“Moving forward, we expect positive sentiment to stay intact,” said Khan.
Trade volumes fell to 216 million shares compared with Friday’s tally of 278 million shares.
Shares of 397 companies were traded on Monday. At the end of the day, 228 stocks closed higher, 145 declined while 24 remained unchanged. The value of shares traded during the day was Rs11 billion.
K-Electric Limited was the volume leader with 17.6 million shares, losing Rs0.09 to finish at Rs8.62. It was followed by Dewan Motors with 15.2 million shares, gaining Rs0.48 to close at Rs21.67 and Dewan Cement with 13.7 million shares, gaining Rs1 to close at Rs18.34.
Foreign institutional investors were net sellers of Rs202 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.
The stock market has been on a northward ride since mid-June after MSCI announced its decision to reclassify Pakistan from its frontier markets to the emerging markets index. While the actual reclassification will take place next year, global investors tend to start factoring it in ahead of the actual change, prompting massive inflows of global funds.
Stakeholders feel that Pakistan should expect at least $200-300 million of foreign inflows in the wake of the decision.
Courtesy : Express Tribune