Market watch: Volatility prevails as mid-caps become favourites

Benchmark KSE-100 index closes flat.

KARACHI: The market remained volatile surging to an intraday high of 16,339 points; however, profit-taking in the later session forced it to close flat. Small and mid-tier stocks again dominated the sentiments as investor switched position from highly capitalised stocks due to positive sector-specific news.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index closed flat (0.41 points) to end at 16,251.79 point level.

“Activity in the index-heavyweight oil and gas sector, and fertiliser stocks remained dull as investors took new positions in mid and small-cap stocks, cement and telecom sector,” said Topline Securities Equity Dealer Samar Iqbal.

However, trade volumes remained healthy and touched seven-month high of 330 million shares compared with Monday’s tally of 246 million shares.

Islamic banks were under the limelight after the State Bank of Pakistan lifted the minimum deposit rate floor. Thus, Islamic banks and conventional banks with sizeable Islamic customer base come out to be clear beneficiaries.

DG Khan Cement remained a favourite in anticipation of bottom-line growth due to expected lower effective taxation and better fuel efficiency on the back of Tyre Derived Fuel plant, to be operational in December 2012. As for Maple Leaf Cement, according to a statement by officials, the company may record the highest profit in six years as cement prices rise and slashed interest rates reduce loan payments.

Reportedly, foreigners were active in telecom giant Pakistan Telecommunication Company as investors continued to bet on international clearing house implementation, fate of which will be decided by the Lahore High Court on November 30, said Elixir Securities analyst Harris Batla.

Shares of 406 companies were traded on Tuesday. The value of shares traded during the day was Rs6.67 billion.

Fauji Cement was the volume leader with 70.96 million shares shedding Rs0.10 to finish at Rs6.77. It was followed by Jahangir Siddiqui and Company with 26.28 million shares losing Rs0.99 to close at Rs15.87 and Maple Leaf Cement with 23.97 million shares gaining Rs0.93 to close at Rs13.95.

Foreign institutional investors were net buyers of Rs352.44 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, November 21^st, 2012.