Market Daily: PSX settles up amid SBP policy announcement 

LAHORE: The Pakistan Stock Exchange (PSX) carried forward its momentum from the second half of the last session and moved north. The market continued its positive momentum on the backdrop of easing political noise and closed up 0.7 per cent to 45,490 index level. Stability in crude oil prices and recent rupee devaluation also led to an interest in E&P stocks, which contributed 64 points to the index.

The KSE 100 index appreciated 333.12 points to touch Thursday’s high of 45,506.11 and ended higher by 316.63 points at 45,489.62. The KMI 30 index added a further 562.95 points with rising cement and oil scripts while the KSE All Share Index extended by 338.53 points. The advancers to decliners ratio stood at 175 to 171.

Meanwhile, the State Bank of Pakistan (SBP) is expected to announce the monetary policy on March 30, 2018Friday. Market analysts expect a revision of interest rate upward for the next two months as rupee devaluation has set the stage for inflation spike. In the last policy statement of January, the bank pushed up the rate by 25 basis points.

Market participation in terms of volumes traded improved by 20 per cent, similarly, the value went up by 13 per cent.

The market volumes jumped to 296.60 million from 248.11 million in the last session. K-Electric (KEL) remained volume leader here on Thursday with traded volume of 51 million shares after re-issuance of intention of acquisition by Shanghai Electric. K-Electric Limited (KEL +3.56 per cent) and TRG Pakistan Limited (TRG -5.00 per cent) collectively summed up to over 30 per cent of the total volume traded. Individually, TRG had 41.88 million shares exchanged.

Top five stocks UBL (+2 per cent), OGDC (+1.4 per cent), LUCK (+1.4 per cent), PAKT (+4.9 per cent) and HUBC (+1.5 per cent) added 147 points to the index gain whereas stocks including TRG (-5 per cent), HBL (-0.4 per cent), DAWH (-1.3 per cent), SNGP (-0.7 per cent) and  PIBTL (-1.4 per cent), withheld 52 points from the index.

TRG saw investor interest after the company through a notification to the exchange announced that its indirect subsidiary, IBEX holdings Limited, has decided to postpone its IPO due to market conditions. The script was floored at the close of the day.

Sazgar Engineering Works Limited (SAZEW +5.00 per cent), the auto rickshaw maker, attained another upper cap after the regulators allowed the company to set up a car manufacturing plant. The vehicles will be assembled and manufactured under the brand name ‘BAIC’. The automobile sector has witnessed exponential growth in the last few years attracting both local and foreign players.

Currently, the industry is dominated by Honda Atlas Cars (HCAR -0.14 per cent), Pak Suzuki Motor Company Limited (PSMC +0.33 per cent) and Indus Motor Company Limited (INDU -0.60 per cent). Nissan, Kia and Hyundai are all set to enter the market. Sighting the potential SAZEW decided to put on hold its auto rikshaw production expansion plan and concentrate on completion of the four-wheel vehicle assembly plant project by June 2019.

Service Industries (SRVI) announced its financial results for 2017, where the company reported EPS of Rs73, down by 29 per cent YoY due to a decline in gross profit margins by 3 percentage points YoY to 17 per cent. Finance cost of the company went up by 45 per cent YoY to Rs343 million, while distribution cost went up by 34 per cent YoY to Rs1.3 billion. Moreover, the company also declared a final cash dividend of Rs22 per share. The financial results accompanied price sensitive information, where company stated about the incorporation of its new subsidiary in the USA to service its US market (recommended long-term investment $1 million over 5 years).

Tariq Glass Limited (TGL) notified exchange about the successful commencement of its Opal Glass dinnerware project with a capacity of 35 tons per day w.e.f. Mar 29, 2018.

KAPCO initiated arbitration proceedings in Singapore against Pakistan Water and Power Development Authority (WAPDA) and Central Purchase Power Guarantee Limited (CPPA-G) to nullify the liquidated damages of Rs28 billion wrongfully imposed by WAPDA/CPPA-G and to enforce its right to claim Rs2.4 billion comprising Company’s net losses not otherwise covered by late payment interest.

Ghandhara Nissan (GHNL) in its notice to exchange notified that the company will invest Rs4.5 billion (about $41 million) over the four years and the plant is expected to commence operations by FY19.

ENGRO Corporation (ENGRO) notified exchange about its investment of Rs3 billion (with an additional limit of Rs1.8 in case of under subscription) via right shares to be announced by the company with a conditional price of not more than Rs30 per share.

Moreover, it was reported that the US dollar rose by 70 paisas on Thursday, trading at Rs116.5 in the open market.

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