The bulls strike back, make up for last three days

The KSE-100 made up for a three-day fall of 127 points by ending 214.49 points higher on Wednesday due to interest from foreign investors. Volumes, though still low according to dealers, also improved slightly to 50.55 million after Monday’s 18-month low and Tuesday’s 29.78 million shares.

The stock market rose 2.24 per cent to end at 9,789.69 points. The net inflow of foreign portfolio investment in the stock market was $2.2 million on Tuesday.

“Net foreign inflow of $2.2 million was taken as a positive sign by investors in a sluggish market and volumes jumped 70 per cent, showing a slight revival of investor interest,” said JS Global Capital’s analyst, Ahmed Rauf.

Investors were also hopeful of a positive outcome of Thursday’s meeting between the SECP and members of the Exchange regarding margin financing.

Local investors are still by and large not interested in the market, according to dealers.

“Foreigners-led rally brought index to touch 9,800 as local institutions followed the bandwagon. Moreover, after a long time individuals also participated in the rally as ready board volume rose as high as 50 million shares; the highest since July 1,” said Topline Securities’ equity dealer, Samar Iqbal.

KSE authorities and the Securities and Exchange Commission of Pakistan (SECP) met last month to discuss margin buying and other leveraged products, which should improve liquidity and the state of the market. They decided to form a committee required to submit its recommendations within 15 working days. A meeting of the stakeholders to discuss the issue is scheduled for Thursday, dealers said.

“Talk of foreign buying in index-heavy OGDC and MCB finally brought some local interest. Oil sector led the initial break out with POL leading from the front. JSCL and AHSL stirred to life late in the day and generated good volumes to close at their upper limits,” said Elixir Securities’ analyst, Sara Shahid.

Companies of the Mansha Group remained in the limelight throughout the day with MCB Bank and Nishat Mills both closing at their respective upper circuits and DGKC gaining near the closing.

Of the 377 active stocks, 263 closed in the green, 99 declined and 15 did not change. The value of the stocks traded in the day’s trade was Rs1.76 million.

Lotte Pakistan PTA was the volume leader with 5.98 million shares traded. Its share price went up by Rs0.55 to end at Rs8.38.

Jah Sidd. Co was the second volume leader with 3.99 million shares. Its share price went up by Rs0.91 to end at Rs12.90.

TRG Pakistan was the third volume leader with 3.1 million shares traded. Its share price went up by Rs0.09 to end at Rs4.12.

Published in The Express Tribune, July 8^th, 2010.