Market Watch: Oil stocks back in favour as investors book profits

Benchmark KSE-100 index gains 106 points.

KARACHI: The stock exchange staged a recovery of sorts on Friday, amidst profit-selling in lower-priced stocks and renewed interest in the energy and power (E&P) sector. Trading started on a strong note and breached the 14,000 point psychological barrier early in the second half of trading, but all was downhill from that point on. However, investors were waiting at dips and snapped up declining stocks to ensure a moderated end to trading.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.77% or 105.68 points to end at the 13,799.42 point level.

“Encouraging news on the resumption of coalition support funds by the US and expectations of a token decline in [the] benchmark interest rate” fuelled positivity in the market, according to Invisor Securities Head of Equity Sales Hasnain Asghar Ali. “The heavily-weighted E&P stocks led the show, [while] various low-priced and speculative cement and fertiliser stocks moved in the opposite direction,” he added.

Trade volumes improved to 380.02 million shares compared with Thursday’s tally of 340.51 million shares. The value of shares traded during the day was Rs8.86 billion.

“Oil stocks dominated; with Pakistan Petroleum Limited closing at its upper limit on rumours that [its] secondary offering would be delayed. Pakistan Telecommunication also closed at its upper circuit on rumours of [a] better-than-expected dividend,” said Ahmad Rauf, analyst at JS Global.

Jahangir Siddiqui Company was the volume leader
with 28.48 million shares losing 5.06% or Rs1.00 to finish at Rs18.77. It was followed by Pakistan Telecommunication with 25.81 million shares gaining 7.92% or Rs0.96 to close at Rs13.08 and DG Khan Cement (DGKC) with 23.14 shares losing 3.88% or Rs1.55 to close at Rs38.42.

“DGKC hit its lower price limit [during] intraday [trading] on rumours that builders are proposing [a] strike against recent price increases,” added Elixir Securities Analyst Faisal Bilwani.

Foreign institutional investors were net buyers of Rs374.19 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, April 14^th, 2012.