KSE-100 close at its highest level since May

Foreign investors bought stocks, especially in the oil sector, which helped the KSE-100 gain 135.58 points to end at 10,114.65, its highest close since May 14.

Volumes were low, but increased to 67.97 million shares from 64.70 million shares traded on Monday. Volumes are usually more than 100 million shares, but turnover has fallen because of the absence of margin buying, according to dealers.

The energy sector is the heaviest weighted sector on the KSE index and the index is slightly biased towards movement of such stocks due to large amounts of paid-up capital.

“KSE-100 index closed above 10,000 points mainly supported by oil stocks as OGDC was the major contributor to the index gain of 135 points. However, lack of interest from investors kept the volumes low. Investors concentrated on the cement sector in anticipation of better results,” according to Topline Securities’ equity dealer, Samar Iqbal.

Oil and Gas Development Company ended 3.03 per cent higher at Rs149.90 and Pakistan Petroleum Limited rose 2.37 per cent.

“Investors were mainly interested in OGDC which increased to a high of Rs149.56, an increase of 38.8 per cent year to date as compared to the KSE-100 index’s increase of 7.7 per cent,” said JS Global Capital’s analyst, Jawad Khan.

“Exports worth a record $19 billion during the fiscal year of 2010, less-than-expected inflation numbers and higher remittances at $8.9 billion came in as a good excuse for the market to continue to rally,” said Elixir Securities analyst Faisal Bilwani.

The Karachi Stock Exchange authorities and the Securities and Exchange Commission of Pakistan (SECP) met last week to discuss reintroduction of margin buying. No final decision was made at the meeting, but it was agreed that a final document would be submitted to the SECP by next week.

Of the 396 stocks actively traded on Tuesday, 243 advanced, 127 declined and 26 remained unchanged. The value of the shares traded today was Rs3.15 billion.

Cement stocks; DG Khan Cement, Lucky Cement and DAP maker Fauji Fertilizer Bin Qasim were major gainers during the the day because of an increase in cement prices by as much as Rs5-Rs10/bag.

“OGDC witnessed the bulk of  volumes  and  touched  Rs150  in  the  closing  minutes  over  continued rumours  of foreign investor  interest, with Pakistan Oil and Pakistan Petroleum due to local interest shown in the scrips,” mentioned Khan.

Further, FY10 auto sales numbers were released yesterday with Indus Motors registering a 49 per cent growth in sales, followed by PSMC with 46 per cent growth in unit sales. Shares of Pak Suzuki Motors gained 2.8 per cent, and Indus Motors’ scrip rose by 0.7 per cent in response to this.

Published in The Express Tribune, July 14^th, 2010.