Daily Times

Pakistan Stock Exchange (PSX) extended its gains on Wednesday, as benchmark Kse-100 climbed above the support level of 4200 index level during the session. The kse-100 index advanced 514.17 points by the closing bell to clock at 40, 377.53 level, as fresh rally was witnessed in the index heavy weight Exploration and Production sector, which was spurred by global oil price surge.

The market performance on Wednesday was sector specific, as investors’ cherry picked E&P stocks following the rebound in the oil price. Global oil price have hit an 8-month peak, following an another pharmaceutical alliance announced a high level of protection of a vaccine candidate, while the oil bulls also reacted to U.S. President Donald Trump’s readiness to allow the transition to Joe Biden’s administration to begin. On Wednesday, U.S benchmark WTI Crude oil traded above $45/ barrel, while Brent Crude also climbed beyond at $48 mark. The last time WTI Crude traded at $45 per barrel was eight months ago, in early March this year, just before Saudi Arabia and Russia disagreed on how to manage oil supply in the pandemic and started a brief oil price war that contributed to the price collapse together with the demand destruction triggered by Covid-19.

Investors also welcomed the developments surrounding the long standing Circular Debt issue, after provincial government of Punjab decided to issue bonds to pay off the burgeoning dues- pertaining to wheat procurement debt which surged to Rs428 billion. Per latest strategy mulled, the provincial government plans to secure further loans through issuance of more bonds to repay the existing loans and amend its poor financial policies. The Punjab Ministry of Finance has sought the federal government’s permission in the regard, following which the said loans are going to be secured.

Market sentiments were already buoyed by Central bank’s Monetary Policy Committee (MPC) decision to keep the policy rate unchanged i.e. at 7 percent, and the update on the resumption of the International Monterey Fund (IMF) program leasing a new ray of hope among the investors. State Bank of Pakistan’s (SBP) governor Raza Baaqir indicated that the technical discussions with the IMF are ongoing, and major progress has been made on key sticking points such as electricity tariffs, taxation, etc.; the timing of the same remains a key sticking point.

However, despite the index surge, the market failed to attract promising investor participation, and thus extended the dry spell of volumes, due to uncertainty over Covid-19 resurgence and lockdown fears. On Wednesday, the volume at Kse-100 index slightly climbed from 105.95 million shares recorded in the previous session to 142.91 million shares, while the overall market volumes were recorded at around 241.95 million shares, improving from the previous session’s volumes of 174.71 million shares.

The volume chart was led Fauji Fertilizer Bin Qasim Limited, followed by Right shares and TRG Pakistan Limited and Unity Foods Limited. The scrips exchanged 28.57 million, 21.16 million and 20.85 million shares, respectively.

Sectors that lifted the index Oil & Gas Exploration Companies with 280 points, Commercial Banks with 93 points, Technology & Communication with 78 points, Oil & Gas Marketing Companies with 31 points and Fertilizer with 25 points. Among the scrips, most points added to the index was by Pakistan Petroleum Limited which contributed 93 points followed by Oil & Gas Development Company Limited with 90 points, Pakistan Oilfields Limited with 68 points, Systems Limited with 41 points and TRG Pakistan Limited with 34 points.

However, the sectors which bucked the index were Cement with 39 points, Power Generation & Distribution with 15 points, Vanaspati & Allied Industries with 4 points, Food & Personal Care Products with 3 points and Insurance with 2 points. Among the scrips, most points taken off the index was by Hub Power Company Limited which stripped the index of 23 points followed by Lucky Cement Limited with 17 points, Fauji Cement Company Limited with 9 points, Engro Fertilizers Limited with 8 points and Abbott Laboratories (Pakistan) Limited with 6 points.