Market Daily: KSE 100 crosses 45,000pts, analysts stand divided

--Confusion amongst investors as market lacks positive triggers yet continues to surge.

LAHORE: Following a lacklustre open and sideways move through most of the first half of Thursday, the 100 Index got wings in the second half and closed up 384.27 points (up 0.86 per cent) at 45,030.22 amid flattish activity.

The KMI 30 index elevated by 662.31 points to 76,057.36 while the KSE All Share Index climbed by 219.85 points.

Tauras Securities Limited Senior Manager Rizwan Ahmed Usmani said that “The market is going in the positive direction, however, it may go down after the coming elections. The market is going up as the dollar is still undervalued despite the Pakistani rupee losing ground to the dollar two days back. The volume traded is also up, if the market was gaining in value without an increase in volume then there would have been a problem, but that is not the case.  However, it is possible that the market may undergo correction of about 1,000 points in the coming days.”

The market volumes were recorded at 228.44 million with 89.21 million shares exchanged in the KSE 100 index script. TRG Pakistan Limited (up 1.51 per cent) was on top of the volume chart with 22.34 million shares exchanged. Lotte Chemical Pakistan Limited was up 0.77 per cent followed with 15.12 million shares traded and Fauji Foods Limited was up 4.39 per cent with a volume of 12.52 million.

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The cement sector pushed up its cumulative market capitalisation by 2.44 per cent. Lucky Cement Limited (LUCK) appreciated by 3.30 per cent, DG Khan Cement Company Limited (DGKC) increased 3.07 per cent and Bestway Cement Limited (BWCL) was up 1.13 per cent.

“Cement and steel and sectors are the best sectors to invest in right now. The former prime minister Nawaz Sharif himself owns steel mills hence the steel sector has done well during the current government’s tenure. On the other hand, Chinese cement has failed in Pakistan and now the priority is being given to Pakistani cement again. Lucky Cement has reached Rs661 which is huge. Similarly, Power Cement has initiated a new plant due to which it is expected to go up,” Rizwan Ahmed added.

Fertilisers also managed to lure in investor interest with Fauji Fertiliser Bin Qasim Limited (FFBL) up 4.74 per cent, and Fauji Fertiliser Company (FFC) up by 2.39 per cent.

Major contribution to upside came from Materials (up 1.75 per cent), Consumer Staples (up 1.03 per cent), and Financials (up 0.85 per cent) amid heavy investor appetite for LUCK (up 3.30 per cent), DAWH (up 4.11 per cent), FFC (up 2.39 per cent), DGKC (up 3.07 per cent), FFBL (up 4.74 per cent), PAKT (up 4.13 per cent), HBL (up 1.33 per cent), BAHL (up 3.02 per cent) and UBL (up 0.72 per cent). Energy (up 0.46 per cent) remained buoyant on the back of overnight gains seen in crude oil prices following a positive contribution from POL (up 1.15 per cent) and PPL (up 0.72 per cent).

Daily traded value for the 100 Index remained flattish at $50.79 million from $51.86 million in the previous session (down 2.06 per cent on d/d basis); TRG ($7.63 million), DGKC ($6.64 million) and LUCK ($4.64 million) were among top contributors from traded value perspective.

In market-related news, State Bank of Pakistan (SBP) has said that the rupee’s decline against the dollar since December will change the incentive structure for exports and imports thus improving the trade deficit. SBP also said that Pakistan’s external debt repayments are “absolutely manageable”. Moreover, the Privatisation Commission is in the process of re-engaging the services of the consortium of financial advisers to proceed ahead with the privatisation of PIA.

However, some analysts are not too excited about the situation. Capital Stake Director Research Maha Jafer Butt while talking to Pakistan Today expressed her concerns and said that “Despite the market crossing the 45,000 mark in the post-devaluation rally there aren’t any big positive triggers. Foreign investors have continued to offload and ended the week as net sellers. Concerns remain over major economic indicators and the political situation is uncertain ahead of elections.”

Trading at the exchange shall remain suspended on March 23, Friday, on account of Pakistan Day.

 

 

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Muhammad Faran Bukhari
The writer is an economics and business journalist reporting for Profit. He is currently an MBA candidate at LUMS University and holds a Bachelors degree in Economics and Politics from the same university. He can be reached at [email protected] or at twitter.com/muhammadfaran
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