Pakistan Equities extended its rise on Tuesday with benchmark KSE-100 Index settling at 39,614 increased by 194 points or 0.49 percent from 39,413 in the previous trading session.
Market picked up momentum after trading sideways initially on the back of gains in Pakistan Petroleum Limited (PPL) and Oil & Gas Development Company (OGDC) over excitement on start of drilling at Kekra-1 well at offshore Indus G-Block. Both the companies hold a 25% stake each, along with global partners, Exxon and ENI. The block offers potential for a sizeable hydrocarbon discovery though historic exploration attempts had failed to materialize into economically viable flows from the Block.
Moreover, the Economic Coordination Committee (ECC) approved withdrawal of Customs Duty, Additional Customs Duty and Sales Tax on import of cotton from February 1st to June 30th to ensure sufficient supply of cotton for the industry. This further improved the sentiments in Textiles with spinning plays such as Nishat Chunian Limited (NCL) being the key beneficiaries.
The recent momentum in the market is being led by expectations of positive announcements for the stock market in the upcoming mini-budget, said an analyst at JS Research. “We caution the rally might be short lived following the mini-budget, as most positives would likely be accounted for by then. Another factor to watch out for is the results’ season, where earnings’ expectations are not bright due to a buildup of macroeconomic pressures over the last year”.
Major volumes for the day were witnessed in retail plays i.e Pak Elektron (PAEL), Bank of Punjab (BOP), Lotte Chemical (LOTCHEM) and K-Electric (KEL). The four shares together contributed 30.7 million shares or 38 percent of the total traded volumes in regular market.
An analyst at Elixir Research Murtaza Jafar expects profit taking to occur near 40,000/300 Index levels.
Published in Daily Times, January 16th 2019.