Market watch: Selective buying helps KSE gain 113 points

Foreign investors re-emerge as net buyers.

KARACHI:

The outflow of foreign investments stemmed and local participants were seen taking fresh positions at Karachi Stock Exchange (KSE), helping the KSE 100-index post gains of 113 points to close at 11,488 points on Tuesday.

Following a massive outflow of about $16 million during the previous week, foreign investors reemerged as net buyers at the bourse. Data maintained by the National Clearing Company of Pakistan Limited (NCCPL) showed foreign portfolio investments registered a net inflow of $323,771 on Tuesday.

“The market was oversold following two days of heavy selling, and institutions were seen taking fresh stances particularly in blue chip stocks,” said Director Arif Habib Investments Ehsan Mehanti. “Rising global capital markets, US Brent crude oil over $115 and higher global commodity prices invited investor interest in scrips across the board despite rising political uncertainty and law and order concerns in Karachi,” he added.

Less than 63 million shares changed hands on Tuesday, compared with 59 million on Monday. Lotte PTA led in terms of volume with 5.7 million shares traded while Azgard Nine and Bank Al-Falah witnessed 4 million and 3.6 million shares traded, respectively. The National Bank of Pakistan ended the day on upper lock one, the first day of trading after its spot period.

Analysts highlighted that the recent decline at the bourse had been led by Oil and Gas Development Company Limited (OGDCL). A research report published by InvestCap asserted that OGDCL contributed 52 per cent of the total declines witnessed in the ongoing month.

“With OGDCL being corrected, the representation of index has improved in favor of other sectors and scrips,” said InvestCap Head of Research Khurrum Shehzad. “Oil is consistently hovering above $100 per barrel and gaining momentum on the back of strikes against Libya by coalition forces, while at the same time demand from Japan is rising,” he highlighted. He said that companies within the oil and energy chain stand to benefit from these developments and that this could help strengthen equity prices in this sector.

Published in The Express Tribune, March 23^rd, 2011.