Stocks gain as earnings season boosts activity

Stocks ended higher on Wednesday as activity increased on expectation of strong earnings, an analyst said.

Early impetus was provided by anticipation about financial results including those of Engro Corporation, said Khalid Iqbal Siddiqui, Research Head at Invest and Finance Securities.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 0.68 per cent or 70.52 points to end at 10,457.34.

Volumes increased to 93.86 million shares compared with 71.97 million shares a day earlier. Second and third-tier stocks dominated the volumes.

Investors still prefer to stay on the sidelines as uncertainty over the leverage product still prevails and ahead of the monetary policy announcement on Friday, said Siddiqui.

A survey of 35 fund managers was conducted to see what changes they expected in the interest rate. They largely believed that the State Bank would maintain the status quo with the discount rate remaining unchanged at 12.5 per cent.

Shares of 364 companies were traded on Wednesday. At the end of the day, 225 stocks closed higher, 115 declined and 24 remained unchanged. The value of shares traded during the day was Rs4.1 billion.

Engro and Habib Bank Limited (HBL) witnessed selling pressure on the back of their result announcements.

Engro lost ground after announcement of its result for the first half of 2010 despite beating general market expectations, said Elixir Securities analyst Sara Shahid. Engro Corporation stock price fell 1.18 per cent to end at Rs189.31.

HBL took a hit as its results failed to excite market participants, said Shahid. The company’s stock price fell Rs0.66 to end at Rs106.29.

Hub Power Company (Hubco) witnessed foreign buying and continued its strong performance on talk of a possible higher dividend payout and Narowal project coming online in October.

Lotte Pakistan PTA was the volume leader with 9.97 million shares gaining Rs0.30 to finish at Rs8.68. It was followed by Bank Alfalah with 8.26 million shares increasing Rs0.64 to close at Rs9.9 and PTCL with 6.1 million shares gaining Rs0.6 to close at Rs19.48.

Published in The Express Tribune, July 29^th, 2010.