Market watch: Index welcomes 2016 with a bang, powers past 33,200

Benchmark KSE-100 index rises 412.64 points

KARACHI: Bulls were charged up on New Year’s as Pakistan equities broke their dry spell to power past the 33,000-point barrier with ease.

Investors took keen interest in cement and textile sectors with lower-than-expected inflation numbers boosting the bullish mood at the bourse.



At close on Friday, the Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 1.26% or 412.64 points to end at 33,228.95.

JS Global analyst Arhum Ghous said cement companies led the gains as DG Khan and Lucky  rallied on strong local dispatch numbers and anticipation of strong demand on the back of the China Pakistan Economic Corridor.

“The textile sector gained as the Economic Coordination Committee approved a proposal for the supply of 60mmcfd of R-LNG to the textile industry during winters,” said Ghous. “The ministry of commerce assured exporters that GSP Plus status will remain valid till 2023 that helped sentiment.

“Nishat Chunian (+5%) and Nishat Mills (+5%) were major gainers in the textile sector.

“A lower than expected CPI Inflation number for December (3.19% year-on-year compared to the estimated 3.89%) also charged up the bulls to venture onwards.”

Meanwhile, Elixir Securities, in its report, stated institutional activity from locals and foreigners remained minimal on account of New Year holiday, but the index was able to charge higher.



“Market opened gap up on morning news of Tax Amnesty scheme to be announced by the Prime Minister to broaden the tax base, and sentiments were further bolstered by mid-day release of inflation reading for December 2015 that clocked in at 3.19% year-on-year and came in lower than street consensus.

“All major sectors gained, but it was cements that led the show from the word go, with investors cheering the release of local provisional dispatches that is expected to lift up companies’ margins and profitability.

“Outlook on the sector remains upbeat given sizeable infra-structure projects lined up for the next 2-3 years. During the day, Maple Leaf (MLCF, +4.99%) hit the upper price limit in early trade, Fauji (FCCL, +3.69%) dominated the volumes chart, while Lucky (+4.60%) contributed most points to KSE-100 index.

“The direction of foreign flows post-holiday season will remain crucial for the market to ride the current trend.”

Trade volumes rose to 124 million shares compared with Thursday’s tally of 100 million shares.

Shares of 326 companies were traded on Friday. At the end of the day, 233 stocks closed higher, 73 declined while 20 remained unchanged. The value of shares traded during the day was Rs6.5 billion.

Fauji Cement was the volume leader with 16.7 million shares, losing Rs1.36 to finish at Rs38.18. It was followed by 1st Dawood Bank with 11.7 million shares, gaining Rs0.26 to close at Rs1.59 and DG Khan Cement with 5.6 million shares, gaining Rs7.08 to close at Rs154.67.

Foreign institutional investors were net sellers of Rs108 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 2^nd, 2016.

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