Boom in global crude helps market to rebound

Ghulam Raza Rajani

KARACHI: After witnessing a nerve shattering week market saw an overwhelming recovery as index bounced back by more than 3 per cent. Boom in global crude prices after distort in Saudi-Qatar oil supply alliance kept local oil scrips well as index on positive track. MSCI related items remained in limelight attaining the major share of investor interest.
The benchmark KSE-100 index closed up by 1,565.63 point to close at 50,120.93 points. KSE All Share Index increased by 931.41 to end at 34,625.00, KSE 30-Index improved by 879.08 points to conclude at 26,254.71, whereas KMI 30-Index enhanced by 2,739.04 points to finish the day at 86,428.96 levels.
Ali Raza at Elixir Securities said Pakistan Equities broke the seven-day losing streak heading into the new week with benchmark KSE100 Index settling over 50K level, up approx 3.2 per cent most in eight months. Market opened gap up and increased steadily during the day as notable blue chips across major sectors including MSCI EM constituents bounced back on buying reportedly by locals institutional investors as they cherry-picked names after recent bout of heavy FII sell off in days leading up to and post MSCI transition. Investors also tracked news flow pertaining to global crude, where Saudi-led alliance cut ties with Qatar that led to an intra-day surge in crude prices, and built position in local energy stocks. At session's end, all major sectors closed in green zone led by Financials where index heavy Habib Bank and United Bank increasing by 4.2 & 5 per cent contributed most to day's gains. See gains to consolidate above 5OK level in the near-term while institutional activity both from foreign and local investors will guide the market in the medium-term. Moreover, successful implementation of leveraged product planned for early next week is also expected to channel fresh liquidity in the system and will help absorb and counter any concerns on recent foreign outflow.
The advance to decline ratio in the broader market remained in favour of bulls. Out of 391 scrips, 325 scrips advanced, 49 declined while the value of 17 scrips remained intact.
The ready market volume increased by 15.05 per cent to 255.14 million shares as compared to 221.76 million shares traded on last trading day. K-Electric Limited topped the list of actives, higher by 0.33 at Rs 7.58 on 14.06 million shares, followed by Bank of Punjab increased by Rs 0.97 at Rs 13.40 on 9.22 million shares and Aisha Steel Mill Limited up by Rs 1.18 at Rs 25.89 on 8.49 million shares.
Other actives were TRG Pakistan Limited ascended by Rs 2.50 at Rs 52.67 on 6.98 million shares and Azgard Nine Limited improved by Rs 0.98 at Rs 12.89 on 6.65 million shares.
After last weeks abysmal performance, KSE-100 bounced back sharply gaining 1,566pts/3.2 per cent to close above the 50k level. Last weeks sharp dip reopened attractive valuations, as evident by today across the board buying activity with early reports suggesting strong institutional support. While the nature of this bounce may point to a relief rally or dead cat bounce, performance in subsequent sessions would hold the key to sustaining a reversal. Top 10 index point leaders were HBL, UBL, ENGRO, LUCK, PPL, DGKC, SNGP, DAWH, MCB & BAHL, with combined contribution of 706pts. On the sector front, Banks added 419pts, followed by Cements 209pts, Fertilizer 177pts and E&P 128pts. Sui Southern Gas reported better than expected FY16 result (LPS Rs6.7), which led the stock to its upper limit 5 per cent. Market participation was mixed, as volumes increased 15 per cent to 255mn.sh, while traded value fell by 12 per cent to Rs13.9bn/US$132mn.
The overall market capitalization enhanced by Rs 268.05 billion to Rs 9.969 trillion against Rs 9.697 trillion observed on last trading day. Wyeth Pakistan Limited and Unilever Pakistan Foods Limited remained the top gainer by Rs 106.35 and Rs 100.00 to close at Rs 2,233.50 and Rs 6,300.00 respectively, while Rafhan Maize Pakistan Limited and Indus Dyeing Mills Limited were the major losers which lost Rs 62.50 and Rs 32.05 to close at Rs 7,100.00 and Rs 608.95 respectively.