Market Daily: KSE 100 continues to rally for third session, gains 271 points

LAHORE: Bulls of the Pakistan Stock Exchange (PSX) showed strength on Thursday as the cement sector advanced. The star sector since the CPEC was unveiled had been hit by market uncertainty driven by the political turmoil lately.

Pakistan stocks closed positive for the third consecutive session, with the benchmark index gaining 271 points to settle at 43,510 level as investor confidence is gradually returning following prospect of timely Senate elections, improving US-PAK relations and Ministry of Finance having an action plan to tackle external account weakness. Resultantly, healthy participation was seen where volume was up 40 per cent and value was up 44 per cent.

The KMI 30 index jumped 781.95 points to 73,887.11 while the KSE All Share Index settled 79.64 points in the green. The advancers to decliners ratio stood at 219 to 124.

The market volumes appreciated from 151.36 million of the previous session to 211.71 million. Lotte Chemical Pakistan Limited (LOTCHEM +1.02 per cent) was top traded with 11.42 million shares exchanged followed by D. G. Khan Cement Company Limited (DGKC +4.04 per cent), volume 10.86 million, and Aisha Steel Mills Limited (ASL +3.51 per cent), volume 9.76 million.

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Investors scuttled to take a position in cement stocks as they cheered news of an increase in North cement prices (further hike in prices expected in coming months). Resultantly a number of cement stocks including LUCK, CHCC, FCCL, MLCF, KOHC and PIOC hit upper limits. The sector cumulatively contributed 176 points to index gain.

Top 5 stocks LUCK (+5 per cent), ENGRO (+2.5 per cent), DGKC (+4 per cent), FCCL (+5 per cent) and MLCF (+5 per cent) added 190 points to the index, while ,top 5 detractors were PAKT (-5 per cent), MARI (-2.2 per cent), PPL (-0.6 per cent), POL (-0.9 per cent) and THALL (-2.7 per cent) which withheld 77 points from the index.

The cement sector fetched top cumulative volume of 39.14 million. The sector came under investors radar after media reports stated the sector expects to post good sales volumes for the month of February 2018. The growth is expected to be led by the government ahead of general elections. On the contrary, reports also stated that prices of cement bags in the North have declined by Rs 10 each for some brands.

AGP Limited (AGP) is scheduled to commence trading on March 5, 2018, at an opening price of Rs 80 per share. The company will be quoted under the Pharmaceutical sector.

Meanwhile, according to a Topline Securities report, Unity Foods (UNITY) reported a loss of Rs36 million in the outgoing quarter as the company booked cost related to issue of right shares. The company is preparing to start commercial production from the end of this month and raw material (Soybean Seeds) in this regard has been procured. The company further disclosed that its solvent extraction plant located at Kotri has a crushing capacity of 450 tonnes per day and 300-tonne capacity to produce pelletising feed products per day. UNITY’s state of art edible oil refinery located at Karachi having a capacity of 150 tonnes per day have started operations.

Dawood Hercules (DAWH) informed the bourse that it has received financing of Rs6 billion in form of rated, over-the-counter, listed secured Sukuk bond placed through private placement, for a period of five years.

Pak Suzuki Motor Company (PSMC) has increased prices of different variants for the second time this year by Rs20,000 per unit. The new prices will be applicable from today. PSMC has also introduced new minor changes to its Wagon R model.

The government will be borrowing $7 billion in the remaining months of the current fiscal year to bridge the widening current account deficit, acknowledged senior officials of Finance Ministry. The official of State Bank of Pakistan (SBP) agreed with the committee members that Pakistan’s external financing requirements will be around $15.5 billion to $17 billion for the current fiscal year and stated, “We are going to the peak in the current fiscal year but things will ease from the next fiscal year with slowdown in China-Pakistan Economic Corridor (CPEC)-related imports.

The State Bank of Pakistan (SBP) stated adequate measures have been put in place to manage the problem; however, their impact will be visible in six months.

Moody’s Investors Service says that its outlook for banks in Pakistan (B3 stable) is stable over the next 12-18 months. The outlook is driven by an accelerating economy and stable funding, while also taking into account the banks’ large holdings of low-rated government bonds, modest capital levels and high asset risks.

Moreover, according to Topline, the government is mulling issuing international bonds by June to generate $3 billion to meet external debt servicing requirements, said minister of state on finance.

According to IMS Research analysts, technically speaking, the KSE 100 index extended gains from the previous session and closed above resistance at 20EMA (43,387). The index now looks set to test next resistance at 43,945 (previous week’s high).

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