Market watch: Stock market records bullish trend, jumps 319 points

Trading volume surges to 153 million shares.

KARACHI: The stock market made a massive recovery on Tuesday on the back of renewed buying interest from local and foreign investors.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 2.83 per cent, or 319.2 points, to end at 11,608.43.

The market was given an early lift with fresh buying in oil stocks and the rally spread across the board after the announcement that the finance minister would visit the stock exchange on March 5 to formally launch the margin trading system, said Elixir Securities analyst Faisal Bilwani.

Trading volume rose to 153.04 million shares compared with Monday’s 86 million shares, as several stocks such as National Bank of Pakistan (NBP) and MCB Bank closed at their five per cent upper limit.

NBP’s higher-than-expected earnings – at earnings per share (EPS) of Rs13.05 – and a cash payout of Rs7.5 per share coupled with a 25 per cent stock dividend added fuel to the rally.

Shares of 655 companies were traded on Tuesday. At the end of the day, 220 stocks closed higher, 68 declined and 367 remained unchanged.

Lotte Pakistan PTA was the volume leader with 27 million shares, gaining Rs1 to close at Rs15.53. It was followed by NBP with 14.06 million shares, gaining Rs3.40 to close at Rs71.59 and Bank of Punjab (BOP) with 9.26 million shares, gaining Rs0.33 to close at Rs7.44.

February performance worst in 20 years

An 8.7 per cent month-on-month decline for the KSE-100 is the worst showing for February in the last 20 years. Historically, the first quarter of the calendar year tends to be a strong time for the exchange, according to KASB Securities.

While domestic and international politics were noisy, ongoing tensions in the Middle East and North Africa triggered a rally in commodities, raising concerns over the follow-through impact on the local economy. More importantly, it fuelled concerns of continued foreign investment outflows from emerging markets spilling over to Pakistan. Throughout the month, investors had also been concerned about the Raymond Davis saga – a US citizen currently in custody on the charge of killing two people in Lahore.

On the domestic front, the 45-day deadline for economic reforms given by Pakistan Muslim League-Nawaz (PML-N) to Pakistan Peoples Party (PPP) coming to a close and removal of PPP from the Punjab coalition kept investors sidelined.

Published in The Express Tribune, March 2^nd, 2011.