The stock market surged to cross the 12,900-point level as investor sentiment rose on the back of trade list finalisation with India and continued foreign buying.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 0.49 per cent or 63.50 points to end at the 12,941.38 point level.
Aiming at complete trade normalisation by the end of this year, the federal cabinet approved a negative list of 1,209 banned items on Wednesday, which will allow trade in all other goods.
Among stocks, Pakistan Petroleum Limited (PPL) led the rise over expectations that its secondary offering will fetch a premium, said JS Global Capital analyst Jawad Khan. The government is planning to divest 2.5% of its holding through secondary public offering and PPL remained out of favour as investors remained apprehensive owing to market talks that the offering may come at a steep discount to the market, further said Khan. PPL gained 3.5%, while Pakistan Oilfields inched up 0.1% amid decent volumes.
United Bank stole the show among banks by jumping to its daily upper limit of 5% over continued local and offshore buying interest, added Khan.
Foreign institutional investors were net buyers of Rs157 million worth of shares, according to data maintained by the National Clearing Company of Pakistan Limited.
Trade volumes fell to 182 million shares compared with Wednesday’s tally of 206 million shares.
Engro Corporation advanced 1.5% over news that its new urea plant will resume operations from March 4 after assurance of gas supply from Sui Northern Gas Pipelines.
Fauji Cement was the volume leader with 15.05 million shares gaining Rs0.02 to finish at Rs4.47. It was followed by Jahangir Siddiqui and Company with 14.81 million shares firming Rs0.40 to close at Rs9.18 and DG Khan Cement with 12.48 shares increasing Rs0.53 to close at Rs28.56.
February marks highest monthly gain since Aug 2009
The stock market continued its march upwards in February by gaining 8.4%, the highest monthly gain since August 2009.
More importantly volumes jumped 148% to 185 million shares per day, the highest activity since April 2010 at the Karachi Stock Exchange (KSE), according to a KASB Securities research note. While the month also marked the first positive monthly foreign inflow of $8.2 million since May 2011 did support sentiments, but the excitement could be attributed to Capital Gains Tax (CGT) relief to a great extent as speculative activity picked up. However, activity in KSE-30 stocks as a percentage of total volumes touched a multi-year low.
Somewhat surprisingly, the positive sentiment on the CGT relief remained unaffected by news reports that the Federal Board of Revenue (FBR) had raised concerns on exemption of stock market investments from ‘source of income’ questions till 2014 and NCCPL’s capability as a collection agent, adds the note.
Similarly, the KSE also shunned a number of political developments including the contempt of court case against the prime minister along with the memogate inquiry, adds the note.
Published in The Express Tribune, March 2nd, 2012.
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