Stocks continue bullish trend for fourth session

The stock market continued to remain positive for the fourth consecutive session on Tuesday as investors bet on higher company earnings.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index added 49.68 points to close at 10,251.53.

With the company result season starting next week, the market is expected to stay positive with possible profit taking before the weekend, said Elixir Securities analyst, Sara Shahid.

Moreover, the KSE board is expected to announce a margin trading product soon, which will result in higher volumes in contrast to the present liquidity problems that had sent volumes down to new lows, said Shahid.

Tuesday’s turnover was 80.77 million shares compared with 67 million shares traded on Monday.

The Karachi Stock Exchange authorities and the Securities and Exchange Commission of Pakistan (SECP) met this month to discuss the reintroduction of margin buying and the KSE sent its recommendations to the SECP on Friday.

The only concern will be the monetary policy statement due on July 30, in which some analysts expect a rate hike, Shahid further said.

Shares of 380 companies were traded on Tuesday. At the end of the day, 168 stocks closed higher, 187 declined and 25 remained unchanged. The value of shares traded during the day was Rs3.72 billion.

Textile and energy stocks led the gains, with Nishat Mills gaining 5.7 per cent to Rs18.66. Buying interest was also witnessed in Nishat Chunian, as volumes were second-highest with 7.9 million shares, following rumours of higher-than-expected earnings, said JS Global Capital analyst, Faiza Naz.

In the oil and gas sector, Pakistan Oilfields Limited (POL) and Pakistan Petroleum Limited were strong as their prices appreciated by 2.6 per cent and 1.3 per cent, respectively. POL surged amid market talk of a possible bonus share announcement in fiscal year 2010 results, said Topline Securities equity dealer, Samar Iqbal.

In the fertiliser sector, Engro showed some strength and closed at Rs187.68.

Netsol Technologies (tech company) surprised the market after announcing plans to expand business by acquiring its associated companies in Europe and North America, which may possibly result in dilution to current shareholders, by virtue of a rights announcement, said Sara Shahid.

“With the corporate season starting from next week, we expect the market to remain positive, with possible profit-taking before the weekend.”

Netsol Technologies was the KSE-100’s top loser of the day; its stock fell 4.97 per cent to end at Rs27.53.

Lotte Pakistan PTA was the volume leader with 11.2 million shares gaining two per cent to close at Rs8.81.

Published in The Express Tribune, July 21^st, 2010.