Market watch: KSE-100 rises on decline in national savings profit rates

Benchmark KSE-100 index increases 295.02 points to settle at 35,653.33

KARACHI: Bullish sentiment continued to dominate trading at the bourse on Wednesday, supporting the KSE-100 index that posted a gain of 295 points as investors cheered the decline in profit rates on National Savings Schemes.

Late on Tuesday, the Central Directorate of National Savings revised the profit rates on various savings schemes and certificates downwards by up to 2.33%.

The stock index soared as soon as trading began as decline in profit rates on savings schemes bolstered investor sentiment and buying activity became evident in the early hours. Later in the day, investor excitement subsided partially, which wiped off some of the gains.

Nevertheless, the KSE-100 index managed to cross the 35,500-point mark and finish in the positive territory.

At close, the benchmark KSE 100-share Index recorded an increase of 295.02 points, or 0.83%, to settle at 35,653.33.

JS Global analyst Maaz Mulla said the market continued to show positive trend as the KSE-100 index touched an intra-day high of +627 points and closed at 35,653, up 295 points.

"On the news front, the Central Directorate of National Savings reduced profit rates by 2.33% to 10.68% on the National Savings Schemes," he said. "The new rates will be applicable to deposits and investments made with effect from November 1."

Traded value at the stock market stood at $68 million, up 21% while volumes came in at 298 million, down 3%. Major contribution to the total market volume came from WorldCall Telecom (+0.7%), Fauji Cement (+3.4%), K-Electric (+1.3%) and Unity Foods (+2.8%).

Maple Leaf Cement (+5.2%), Pioneer Cement (+5%), DG Khan Cement (+2.4%), Cherat Cement (+3.6%) and Fauji Cement (+3.4%) were major contributors from the cement sector.

The banking sector closed higher than Tuesday's close where Bank Alfalah (+1.2%), MCB Bank (+0.8%), National Bank (+0.8%) and HBL (+0.3%) were the major movers.

"Moving ahead, we expect the market to remain positive in the medium term, however, in the short term profit-taking cannot be ruled out," the analyst said.

Arif Habib Limited, in its report, stated that the index rose 627 points, but selling pressure brought the net gain down to 295 points at close.

Buying activity was evident across the board on the back of reduction in rates on return on the National Savings Scheme. "That gave confidence to investors for further accumulation, though the index had already registered a significant surge," it said.

Overall trading volumes reached close to the 300-million mark, which was slightly below Tuesday's levels.

The cement sector led the volumes with trading in 45.1 million shares, followed by the chemical sector (29.5 million) and technology sector (28 million), the report added.

Overall, trading volumes decreased to 298.1 million shares compared with Tuesday's tally of 308.5 million. The value of shares traded during the day was Rs10.5 billion.

Shares of 379 companies were traded. At the end of the day, 248 stocks closed higher, 115 declined and 16 remained unchanged.

WorldCall Telecom was the volume leader with 15.8 million shares, gaining Rs0.01 to close at Rs1.49. It was followed by Fauji Cement with 15.7 million shares, gaining Rs0.54 to close at Rs16.36 and K-Electric with 14.7 million shares, gaining Rs0.05 to close at Rs3.91.

Foreign institutional investors were net buyers of Rs77.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.