Market watch: Stocks gain as third quarter results trickle in

Benchmark KSE-100 index adds 53 points.

KARACHI: Monday saw the first day of trading at the Karachi bourse after the introduction of the new free-float methodology for the computation of the Karachi Stock Exchange-100 (KSE-100) index. The market closed positive, with major activity in the cement sector over healthy expected earnings.

“Stocks closed higher in the quarter-end earnings announcement session at the KSE on strong earnings outlook,” said Ahsan Mehanti, analyst at Arif Habib Corp.

“Lower leverage costs, recovery in global stocks and commodities, and easing political concerns after the Supreme Court approved the draft letter in the NRO implementation case played a catalyst role in bullish sentiments at the KSE,” he said. “Institutional interest in selected blue chip leveraged stocks affected sentiments [as well].”

The KSE’s benchmark 100-share index climbed 0.34% or 52.69 points to end at the 15,746.90 points level. Trade volumes plunged to 82 million shares compared with Friday’s tally of 113 million shares. The value of shares traded during the day was Rs3.03 billion. Foreign institutional investors were net buyers of Rs132.58 million, according to data maintained by the National Clearing Company of Pakistan Limited.

“Some recovery was seen at the local bourse, led mainly by cement stocks. With the free-float index commencing from today, overall volatility declined due to [the] new weightage [assigned to stocks],” commented Samar Iqbal, equity dealer at Topline Securities.

Shares of 376 companies were traded on Monday. At the end of the day 154 stocks closed higher, 150 declined while 72 remained unchanged. Maple Leaf Cement was the volume leader with 10.32 million shares gaining Rs0.63 to finish at Rs9.32. It was followed by DG Khan Cement with 7.71 million shares gaining Rs0.59 to close at Rs50.98 and Fauji Cement with 6.14 million shares closing flat at Rs6.32.

“Selling pressure was seen in oil stocks, [albeit] with low volumes, on expected state institution selling,” added JS Global analyst Shakir Padela. “The market should consolidate and readjust itself with the quarterly result season coming into full swing,” he added.

Published in The Express Tribune, October 16^th, 2012.