Boom times continue as KSE 100-index touches another high

Pakistan Stock Exchange’s benchmark KSE 100-share index remained bullish on Monday closing at another peak 39,774.61; the index surged around 271.82 points. Due to unchanged monetary policy, as announcement by the State Bank of Pakistan (SBP), at 5.75 per cent, the banking sector led the market. The biggest index movers were National Bank of Pakistan (NBP) with 6.7 million (5 per cent) shares traded followed by Bank Alflah Limited with 2.2 million (4.20 per cent) and MCB Bank Limited with 542,100 (1.82 per cent) shares traded.

“Further excitement came after CPI for the month of July 2016 was recorded at 4.12%, compared with 3.19% in June 2016. Interestingly, beverage and tobacco which remain 1.12 per cent month-on-month also contributed to higher than anticipated CPI number for July (which means consumption has moved up),” according to inter-market security, IM Sales.

Further support came from exploration and production (E&P) companies like Pakistan Oilfields (POL) limited with 355,200 (1.89 per cent) shares traded followed by the Oil and Gas Company of Pakistan (OGDC) with 1 million shares (+0.13 per cent) and Pakistan Petroleum Limited (PPL) with 428,700 shares (+1.42 per cent) traded which kept the index alive on the back of reversal in crude oil prices.

“Although after the Asian market closed oil came under pressure once again as Reuters data showed yet another increase in OPEC production, helped by production hikes in Nigeria and Iraq. There is also data pointing to yet another increase in the rig count in the US,” said IM Sales.

On the domestic front Sindh Chief Minister Murad Ali Shah extended Rangers powers for three months while their stay in Sindh has been extended for an additional year which left a positive impact on the market.

Additionally, foreign portfolio investment has turned into inflows after 1 year of outflows as the MSCI upgrade effect is coming into play. Daily Traded Value for the session clocked in at $81.73 million against $42.74 million in a last Friday’s session. Market participation also went up to 122 million shares compared to 96 million on Friday.

Technically speaking, while immediate support is at 39,328.76 (10 EMA) analysts expect the 100 index to eventually test trend line resistance (currently at 42,730).

According to JS Research the sugar sector rallied Monday on the back of news of sugar prices surging to Rs 76-78/kg. Top index movers of the sector today were JDWS (+1.50%) and MRNS (+5%). Moving forward, analysts remain bullish on the market and expect it to break the psychological level of 40,000 points this week.