Market watch: Bourse continues to breach historic highs

Published: January 30, 2013

Positive local and foreign interest, macroeconomics boost KSE 167 points. PHOTO: AFP

KARACHI: 

Breaching all-time highs has become routine for the largest stock market of Pakistan as the Karachi bourse once again closed at a historic high on the back of foreign interest, institutional buying and the government’s decision to shuffle up priorities in its new gas management policy. Moreover, expectations regarding a healthy corporate results season catalysed buying.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index climbed 0.98% or 167.05 points to end at 17,172.04 point level. Trade volumes rose nominally to 197 million shares compared with Monday’s tally of 190 million shares.

“Attractive dividend yields and healthy anticipated earnings growth helps the index continue breaking records,” reported Khalil Usmani, analyst at JS Global Capital. Rumours of foreign interest also continued to build investor confidence as the KSE is still the cheapest in the region, added Usmani.

The value of shares traded during the day was Rs5.99 billion.

Among macroeconomic triggers, the Economic Coordination Committee (ECC) decided to give preference to industries and fertiliser producers for gas allocation over the CNG sector in its new gas load management strategy.

The decision of the ECC initiated a rally in the fertiliser sector as Engro Corporation, deemed to be the largest beneficiary of the new policy, closed near its upper limit and among the top five on the volume leader board, according to Elixir Securities daily review of the market.

Cements continued to attract buying over earnings excitement. Telecoms also witnessed buying as investors expect higher international call termination rates, which rolled out from October 1, 2012, to propel sector’s earnings.

The index-heavyweight oil sector, which was out of favour, made a decent comeback with the Oil and Gas Development Company and the Pakistan State Oil generating good interest.

Telecard Limited was the volume leader with 34.71 million shares gaining Rs0.72 to finish at Rs3.43. It was followed by Fauji Cement with 18.98 million shares shedding Rs0.17 to close at Rs7.95 and DG Khan Cement with 13.24 million shares rising Rs1.24 to close at Rs55.57.

Foreign institutional investors were net buyers of Rs340.2 million ($3.47 million), according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 30th, 2013.

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