Market watch : Despite lacklustre activity, bourse closes in black

Benchmark KSE-100 index climbs 58 points.

Our Correspondent December 18, 2012

KARACHI: Activity remained lacklustre with bourse hovering around previous highs following rupee’s resistance as it hovers near 100 to the greenback. The index, however, managed to close in the black as investors hoped that the National Saving Rates will see a cut soon, promoting fresh buying in the market.

The rupee has already depreciated 3% against the dollar in fiscal 2013 to date, according to a research note from Elixir Securities.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.34% or 57.66 points to end at the 16,858.68 point level. Trade volumes improved to 119 million shares compared with Monday’s tally of 92 million shares.

The fertiliser sector remained on the investors’ radar following the news of better than expected sales during December, said Samar Iqbal, equity dealer at Topline Securities.

Moreover, the government’s eagerness to resolve gas supply issues of Engro Corporation brought life into the stock, while Hub Power Company (Hubco) – the volume leader – remained under pressure on reported institutional selling, reported Harris Batla, analyst at Elixir Securities.

The financial sector yet again faced the brunt of the new monetary policy as investors anticipated a reduction in their profitability due to lower discount rates. However, MCB Bank again bailed out the sector.

Shares of 382 companies were traded on Tuesday. The value of shares traded during the day was Rs3.70 billion.

Hubco was the volume leader with 10.35 million shares down Rs0.52 to finish at Rs43.98. It was followed by Jahangir Siddiqui and Company with 9.53 million shares losing Rs0.48 to close at Rs16.22 and Byco Petroleum with 8.4 million shares climbing Rs0.15 to close at Rs11.16.

Foreign institutional investors were net buyers of Rs138.88 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Analysts say that all eyes will be on the fluctuation in the exchange rate, but they expect the textile sector to benefit due to high export prices translating into higher margins. On the other hand, the interest rate cut seems to be in favour of the highly-leveraged cement sector as cost of borrowing goes down, translating positive on their books.

Published in The Express Tribune, December 19th, 2012.



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