News Analysis |
The Pakistan Stock Exchange (PSX) rallied on the post-election positivity with the benchmark KSE-100 index gaining 750 points to close at 42,089 points. The index gained over 760 points within minutes of opening, to trade sideways for the most part of rest of the session.
The volumes climbed to 254 million while the traded value also rose to Rs9.2 billion. Pakistan equities celebrated the 2018 election results with a strong positive opening Thursday. The Index retreated till 41,700 points level in mid-day after a gap opening however late buying in Index heavyweights Exploration Production (E&P), Cement, Steel and Banks pushed the Index higher to close above 42,000 psychological barriers.
Bulls continued to dominate, where activity in all key sectors such as cement, steel and banks was seen. Both, local and foreign investors, showed aggressive participation in the market today. The relief rally on Thursday was based on the conclusion of the General Elections saw a single party winning the majority. As expected, the market opened gap up and held on to gains all day long.
The KSE-100 index jumped to intraday high of 42,136.06 with a rise of 796.84 points and ended just there. The index settled higher by 749.94 points at 42,089.16. The KMI 30 index struck 70,974.28 with an appreciation of 1,696.20 points to record day’s high and settled up 1,627.33 points at 70,905.41. The KSE All Share Index closed 357.83 points in the green. The advances to decliners ratio stood at 207 to 103.
Market participation rises in terms of volume and value by 33 per cent and 19 per cent respectively. The market volumes surged to 254.33 million from 190.85 million in the last session. The top slots went to the same regular names, The Bank of Punjab (BOP -6.13 per cent), volume 25.01 million, Pakistan International Airlines Corporation Limited (PIAA +20.04 per cent), volume 21.52 million and K-Electric Limited (KEL +0.36 per cent), volume 18.03 million.
The engineering sector came out as the biggest gainer with 3.96 per cent added to its cumulative market capitalisation. Ittefaq Iron Industries Limited (ITTEFAQ +5.96 per cent), Aisha Steel Mills Limited (ASL +4.96 per cent) and Amreli Steels Limited (ASTL +5.00 per cent) were amongst scripts at maximum price for the day.
The cement sector was next with an increase of 3.43 per cent in its market capitalization. Kohat Cement Company Limited (KOHC +4.99 per cent), D. G. Khan Cement Company Limited (DGKC +4.99 per cent) and Pioneer Cement Limited (PIOC +4.99 per cent) were included in the list of those capped.
The Banking sector remained in the limelight as investors further expect around 100bps rise in policy rate by December 2018 that would lead to higher spread for banks. As a result, the top four banks contributed 143 points to overall gain in the index. Similarly, Fertilizer and Cement sector contributed 117 and 120 points respectively with former due to better industry outlook and latter due to its attractive valuation.
Technically speaking, the KSE-100 index extended gains from the previous session amid further expansion in turnover to close near intraday high. Next resistance is the falling trend line resistance (42,200) and then the 200EMA (42,990). While the short-term target for the KSE-100 index is 43,000.
Daily Times reported that Equity analyst Maaz Mulla attributed this positive run to the results of General Election 2018, where so far Pakistan Tehreek-e-Insaaf won the elections, while final results are yet to be announced. “We expect the market to remain green with flows from local and foreign institutions directing the market”.
The Pakistan Rupee appreciated by 10 paisa against Dollar to close at Rs128.17. During Tuesday and Thursday trading sessions, the rupee gained 33 paisa whereas Dollar in the open market fell by Rs1.10. The dollar in open market floated at around Rs128.90 and closed at Rs130 on Tuesday. Since Monday dollar has lost Rs2.10 in the open market. The economic problems have been the worrisome and continuous decline in foreign exchange reserves and external debt payments have been keen issues to address on an emergent basis.