PSX index closes higher as market cheers successful elections

Author: Staff Report

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 heavy weights Exploration Production (E&P), Cements, Steel and Banks pushed the Index higher to close above 42,000 psychological barrier.

Bulls continued to dominate, where activity in all key sectors such as cements, steel and banks was seen. Both, local and foreign investors, showed aggressive participation in the market today.

Optimism continued in cement stocks for the second consecutive session with Lucky Cement (Luck) gaining 3.26 percent, Maple leaf cement (MLCF) gaining 4.4 percent, Fauji Cement (FCCL) gaining 4.74 percent while DG Khan Cement (DGKC) gaining 5 percent closed at upper price limit.

Similarly, International Steel (ISL) gaining 4.28 percent and Amreli Steels (ASTL) gaining 5 percent traded at their respective upper circuits.

Volumes chart was dominated by the retail plays namely Bank of Punjab (BoP) and Pakistan International Airlines (PIA). The former was battered as investors showed concerns of increased scrutiny in the Bank, post possible change of power in Punjab; while PIAA rallied on optimism that the PTI led government will take steps to restructure loss making State Owned Enterprises.

“With Index starting to find a sustained momentum above the former resistances at 41,900/800 levels our chartist sees further Index striving towards 42,900/ 43,000 levels”, said Murtaza Jafar, an analyst at Elixir Securities.

Total volumes increased by 33 percent day-on-day (DoD) to 254 million shares, while value traded also inched up by 19 percent DoD to $ 72 million. BOP from the banking sector led the volumes with more than 25mn shares exchanging hands.

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”.

Published in Daily Times, July 27^th 2018.