Market watch : Company results continue to attract investors

KSE-100 crosses 12,000 points during trade, closes 14 points higher.

KARACHI:

Results-based buying on the back of better-than-expected earnings helped the stock market post a positive close on Wednesday.

The Karachi Stock Exchange (KSE) 100-share index gained 0.12 per cent or 13.98 points to end at 11,947.44 points.

The index crossed the 12,000-point psychological barrier during trade, touching 12,050 points. However, late selling in oil and fertiliser sector stocks wiped initial gains. Despite uncertainty over policies that may be implemented in the upcoming federal budget, market participants were in a buying mood, said Elixir Securities analyst Sibtain Mustafa.

Trade volumes jumped to a massive 143.73 million shares against the previous day’s tally of 110.35 million shares.

Buying interest was sector-specific but oil stocks put together some of the best gains. Oil and Gas Development Company Limited (OGDCL) drove the oil sector, posting 15 per cent higher profits in the nine months ended March 31, while also announcing an interim cash dividend of Rs1.5 per share. The initial reaction to the result announcement and resumption of dividends brought in excitement, but late selling pushed the stock to close in the red, added the analyst.

Engro Corporation also announced its earnings, posting earnings per share of Rs5.22 for the March quarter. Despite nine per cent growth in earnings and resumption of gas supply to the company’s fertiliser plant, the stock failed to carry its positive momentum, closing a marginal 0.06 per cent higher.

With the index continuing to flirt with the 12,000-point mark, analysts believe budgetary measures will play a key role in activity, as the end of the earnings announcements season draws closer.

Shares of 387 companies were traded on Wednesday. At the end of the day, 175 stocks closed higher, 126 declined and 86 remained unchanged. The value of shares traded during the day was Rs4.37 billion.

Lotte Pakistan PTA, having exceeded market expectations with its corporate results on Tuesday, was the volume leader with 51.53 million shares, gaining Rs0.35 to close at Rs17.01. It was followed by Pakistan Telecommunication Company (PTCL) with 22.4 million shares, gaining Rs0.27 to close at Rs17.1 and Descon Oxychem with 4.21 million shares, gaining Rs0.42 to close at Rs8.28.

Published in The Express Tribune, April 28^th, 2011.