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The benchmark KSE-100 index ended the day at 10,187 points after posting gains of 72 points. This is the highest closing achieved by the key index since May 19. During the day’s trade KSE-100 index surpassed the 10,200 mark twice during trade on Wednesday. But profit taking in late trade clipped gains.
Volume of shares traded was the highest level witnessed in the past three weeks and 56 per cent higher than yesterday. Equity turnover was 121 million shares of 404 companies were actively traded today. Analysts attributed the increase in volume of shares traded and number of trades to increased interest following indications that the new leverage product may be approved soon. Senior Analyst at Aziz Fida Husain Securities Hasnain Asghar Ali commented, “valuations are still at discount if a flexible and desired leverage product is added”.
Lotte Pakistan retained its place as volume leader with 18 million shares changing hands. National Bank of Pakistan and Dera Ghazi Khan Cement witnessed volumes of 6.69 million shares and 6.22 million shares respectively.
The broader market also witnessed interest. Share prices of 246 stocks advanced, while 133 declined and 25 remained unchanged. CEO Shehzad Chamdia Securities, Ehsan Mehanti said “that strong valuations are available in blue chip banks, fertilizer and oil marketing stocks, and interest has improved ahead of earnings announcement sessions”. A report issued by BMA Capital on Wednesday also pointed out that profitability of cement companies is likely to improve after successive increases in the prices of cement in the local market.
Analysts said that rising international equity markets have provided a positive signal to local equities. They say that interest of foreign investors has remained strong, even in recent trade sessions when volumes dried up from the market. “Now the expectation of early approval of leverage products by SECP has helped boost interest”, explained Mehanti.
But analysts are still advising investors to exercise caution in coming sessions. Hasnain Asghar Ali said that “rally initiators are likely to come in for profit taking” in days ahead. He added that once there is more liquidity in the market, “foreign might capitalize on exit opportunities that they have been denied so far due to low strength and shallowness”. Meanwhile the Securities and Exchange Commission of Pakistan has said that the proposal set forth by a committee of stakeholders concerning the features of leverage products is under review and may be approved soon.
Published in The Express Tribune, July 15th, 2010.
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