Market watch: Positive election hopes trigger index to record high

Index surges on optimism over improved chances of economic shake-up.

KARACHI: Pakistan Tehreek-i-Insaf founder Imran Khan’s injurious fall from a forklift on Tuesday evening drew sympathy across Pakistan … and roused gleeful pundits to invest more heavily in the stock market in the trading session on Wednesday. The index now stands at an all-time high of 19,472.55 points.

Analysts were careful in wording the sudden surge in pre-election sentiment, saying that investors seem confident that the new government will not pose a “major risk” to the economy.

“Continuous foreign buying in the last few days triggered a strong rally with improving volumes,” said Samar Iqbal from Topline Securities. “Values traded crossed the Rs9 billion mark with renewed interest in large cap stocks like Engro, Pakistan Petroleum, Oil and Gas Development Company, DG Khan Cement and Pakistan Tobacco.”

The Karachi Stock Exchange’s (KSE) benchmark 100-share index surged 1.09% or 209.81 points by the end of the session. Trade volumes ballooned to 252 million shares, compared with Tuesday’s tally of 173 million shares. The value of shares traded during the day was Rs9.25 billion.

“Cements, that had remained laggards in recent rallies despite posting record sales in recent announcements, gained investors’ interest on hopes of timely elections due this weekend,” reported Jawwad Aboobakar from Elixir Securities. “Value buying in textiles and financials also recovered Nishat Mills (up 3.74%), Nishat Chunian (up 3.59%) and United Bank (up 1.54%).

Fauji Cement was the volume leader with 54.24 million shares, gaining Rs0.11 to finish at Rs10.05. It was followed by TRG Pakistan with 21.29 million shares, losing Rs0.90 to close at Rs8.78; and Lotte Chemical with 14.39 million shares, gaining Rs0.31 to close at Rs7.77.

Foreign institutional investors were net buyers of Rs1.36 billion of securities, according to data maintained by the National Clearing Company of Pakistan Limited.

“Foreign flows were witnessed in almost all blue chip stocks, as investors are confident that fair elections will be held on time,” added Fahad Ali from JS Global Capital.

Published in The Express Tribune, May 9^th, 2013.

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