Market watch: Spurred by developments, index shoots past 31,000

Benchmark KSE-100 index gains 351.8 points.

KARACHI: Spurred by hope of securing the next tranche of the IMF’s Extended Fund Facility, the announcement of which was made on Saturday, and buyers’ interest in Oil and Gas Development Company (OGDC), the index shot past the 31,000-point barrier on Monday.

At close, the Karachi Stock Exchange’s (KSE) benchmark 100-share index increased 1.14% or 351.8 points to end at 31,281.83. After the government scrapped the plan of offloading 10% of its stake in OGDC after a poor response in the book building process, buyers showed interest and helped the company reach its upper circuit.



“Buying interest was evident in OGDC (PA +5%) after institutions failed to contribute in its Secondary Public Offering (SPO) as the government scrapped the divestment over the weekend,” said M Zainul Abedin of Elixir Securities.

“News about the fifth tranche of IMF also pushed the momentum in early trade helping the index record new highs led by cements and textiles namely DG Khan Cement (DGKC PA +1.36%), Lucky Cement (LUCK PA -.07%), Nishat Mills Limited (NML PA -1.21%) and Nishat Chunian Limited (NCL PA +1.04%). However, profit-taking in the latter half of the session closed LUCK and NML in the red.

“We expect banks, cements and textiles to assist the underlying trend and test 31,600-31,700. Our cherry pickings remain MCB, BAHL, DGKC, CHCC, NML, NCL,” said Abedin.

Meanwhile, JS Global analyst Mohammed Mobeen said the auto sector gained further momentum led by Honda Atlas Car (HCAR) that also reached its upper circuit.

“Mari Gas enjoyed its northwards journey to reach its upper circuit following anticipations of a possible change in the pricing formula.

“Going forward, with the Pakistan macro story improving on the back of declining global oil prices, we expect the market to gain further momentum from here with textile and cement sectors as our preferred sectors,” Mobeen suggested.

Trade volumes slightly rose to 330 million shares compared to 274 million on Friday.

Shares of 419 companies were traded on the first trading session of the week. Of these, 143 companies declined, 253 closed higher while 23 remained unchanged. The value of shares traded during the day was Rs16 billion.



Jahangir Siddiqui and Company was the volume leader with 27.9 million shares, gaining Rs0.22 to close at Rs12.31. It was followed by Pak International Bulk Terminal Limited with 23.2 million shares, gaining Rs0.96 to close at Rs23.30 and Bank Al-Falah with 13.2 million shares, losing Rs0.12 to close at Rs31.19.

Foreign institutional investors were net sellers of Rs179 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, November 11^th, 2014.

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