KSE gains as investors await leverage

KARACHI: After a day’s respite, the bulls returned to Karachi Stock Exchange on Friday. The last trading day of the week witnessed buyers’ interest from the opening bell. The benchmark KSE-100 index gained 58 points to close at 10,154.

The overall market also posted gains. Of 353 stocks actively traded, 193 advanced, 129 declined and 31 remained unchanged.

The oil and gas sector led gains and investors reacted positively to the announcement of a new gas discovery by Oil and Gas Development Company (OGDCL). However, market volume stood at a paltry 55.8 million shares compared with over 91 million shares on Thursday.

Total number of trades was an equally dismal at 46,312. Highest volume was witnessed in Azgard Nine in which 8.147 million shares were traded and the stock price increased Rs0.83 to Rs12.80.

“Bullish activity was witnessed ahead of earnings announcements,” said Director of Arif Habib Investments Ehsan Mehanti. He added that “investors are showing particular interest in fertiliser as well as oil and gas sectors.”

Ehsan said that higher prices of crude oil in international markets and expectations of approval of leverage products by the Securities and Exchange Commission of Pakistan (SECP) have also improved investor sentiments towards local bourses.

Earlier, analysts had been advising caution for the day’s trade. BMA Capital’s morning brief had predicted that the index would test the 10,000 level. The second half of the trade started with selling pressures but brokers say that was caused by day traders booking gains ahead of the weekend and after absorbing these sales, the market shot up in the last hour of trade.

Data released by the National Clearing Company of Pakistan (NCCPL) showed that foreign investors made net investments worth $1.27 million on Friday.

Senior analyst Aziz Fida Husain Securities Hasnain Asghar Ali dismissed the notion that the market showed much strength. He said net foreign investment for the day was “peanuts”.

Hasnain commented that “the market should be stable above 10,000 but it is still hostage to the outcome on leverage products.” He explained that volumes are still low as most investors are awaiting “concrete developments or approval from the SECP.”

Friday’s gains helped the benchmark index climb 1.8 per cent over last week’s close. Average volumes also increased to 80.3 million shares compared to last week’s average of 55.2 million shares.

Analysts at BMA Capital commented that the market would require better volumes for the bull-run to sustain. They reiterated that 10,000 will remain a crucial support level in upcoming trade sessions.

Published in The Express Tribune, July 17^th 2010.