Stock market gains 129 points on Sukuk issuance

Stock market gains 129 points on Sukuk issuance

The stock market gained 129 points on Friday, buoyed by the anticipated release of a Rs200 billion Sukuk by the government. The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed at 35,125 points, up from 34,996 points, reflecting a positive sentiment among investors.

Analysts at Arif Habib Limited remarked that the FTSE rebalancing, which had been highly anticipated, turned out to be a non-event at the stock market. Despite this, the market maintained a positive trajectory throughout the trading session, although the gains were modest. At one point, the KSE-100 index rose by 212 points but settled at a 129-point increase just before the roll-over week commenced.

The cement sector, which initially showed promise, ended the day in the red. This downturn was triggered by news casting doubt on the sustainability of recent price hikes in cement bags, prompting investors to offload their cement stocks. The initial positive sentiment seen in the market in this sector was reversed, leading to a sectoral decline by the end of the trading day.

Conversely, the power sector recorded gains, supported by the upcoming Rs200 billion Sukuk issuance. This government move is expected to ease liquidity pressures on oil marketing companies (OMCs) and the power sector, thus contributing positively to market performance. The exploration and production (E&P) sector also benefited from a rise in oil prices, with most stocks in this category showing gains, apart from Pakistan Petroleum Limited (PPL).

Sector-wise contributions to the KSE-100’s performance included power (+83 points), E&P (+77 points), food (+19 points), cement (-18 points), and banks (-16 points). Despite the overall positive trend, trading volumes saw a decline, falling from 163 million shares to 129.3 million shares, a 21% decrease day-on-day. The average traded value at the market also dropped by 7%, reaching $26.9 million compared to $28.8 million previously.

Significant contributors to trading volumes included stocks such as Samba Bank Limited (SMBL), WorldCall Telecom Limited (WTL), K-Electric Limited (KEL), Maple Leaf Cement Factory (MLCF), and Pak Elektron Limited (PAEL), which together accounted for 48% of the total volumes.

Stocks contributing positively to the index included Hub Power Company (HUBC) (+76 points), Pakistan Oilfields Limited (POL) (+35 points), Oil & Gas Development Company (OGDC) (+34 points), Engro Fertilizers Limited (EFERT) (+16 points), and Nestle Pakistan Limited (NESTLE) (+14 points). On the negative side, significant detractors were Habib Bank Limited (HBL) (-10 points), Fauji Fertilizer Company (FFC) (-10 points), Bank Al Habib Limited (BAHL) (-9 points), Thal Limited (THALL) (-7 points), and United Bank Limited (UBL) (-6 points).

The anticipated Sukuk release appears to have bolstered investor confidence, particularly in the power and energy sectors. As the market prepares for the roll-over week, investors remain cautiously optimistic, monitoring both local and global economic indicators for future trends.