Market watch: As political dramas ebb, stock market stages comeback

Absence of political noise gives new resolve to investors.

KARACHI: As the political drama from the previous week receded in investors’ memories, the Karachi bourse witnessed renewed interest as pundits built up their positions ahead of major earnings announcements.

“Equities closed positive for a fourth straight session, as investors cheered clarity on the political front, brushing aside weekend news that IMF requires Pakistan to make tough economic decisions before entering into a new [loan] programme,” said an analyst note issued by Elixir Securities.

“Selective stock picking was seen at the Karachi market,” added Topline Securities’ equity dealer Samar Iqbal. “Maple Leaf Cement and Fauji Cement remained in the limelight on expectations of better December quarter results. Fauji Fertilizer also performed well ahead of its December result. Interest was also seen in closed-end funds, as most them have already announced their meetings [during which they will] decide whether to open or revoke.”

The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 0.24% or 39.04 points to end at the 16,640.81 points level. Trade volumes, however, were lower at 128 million shares, compared with Friday’s tally of 182 million shares. The value of shares traded during the day was Rs3.73 billion.

“Second-tier cement stocks attracted investors, largely [on] pre-result accumulation, on expectations of healthy results and interim payouts,” added the note from Elixir Securities. “Fears of margin compression in the banking sector, on the other hand, kept sector volumes low. Engro Foods traded intraday at a new high of Rs100.75 and generated decent volumes, after the company re-launched its low-priced packaged milk Omung, which competes with consumers of non-packaged milk.”

Shares of 352 companies were traded on Monday. At the end of the day, 155 stocks closed higher, 146 declined, while 51 remained unchanged. Maple Leaf Cement was the volume leader with 16.12 million shares, gaining Rs0.28 to finish at Rs15.92. It was followed by Fauji Cement with 13.59 million shares, losing Rs0.07 to close at Rs7.30; and Byco Petroleum with 8.72 million shares, losing Rs0.08 to close at Rs13.90.

Foreign institutional investors were net buyers of Rs85.48 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 22^nd, 2013.

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