Market watch: Telecom sector pulls market higher

Higher international call rates expected to boost revenues.

KARACHI: The market continued its rally to historic levels, as telecommunication companies provided stimulus to the market on Monday, helping it notch a higher close than the Friday session.

“The telecom sector remained in the limelight, as investors expect that December quarter earnings will be better due to an increase in international call rates,” reported Samar Iqbal, equity dealer at Topline Securities.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.13% or 21.84 points to end at 17,288.07. Trade volumes improved to 252 million shares compared with Friday’s tally of 142 million shares.

Shares of 361 companies were traded on Monday. At the end of the day, 172 stocks closed higher, 142 declined while 46 remained unchanged. The value of shares traded during the day was Rs4.86 billion.

“Pakistan Petroleum announced its half-year result, with earnings per share of Rs13.58, and declared a dividend of Rs5 per share. It came under selling pressure and closed down 1% with a total volume of 1.3 million shares,” reported JS Global analyst Khalil Usmani.

“Engro, with rumours of strategic structural reforms in gas supply, gained 2% with 7.3 million shares traded during the day.”

“Engro Corporation opened up today, after local funds in the last trading session bought five million shares from foreign institutional investors (FII), and news that FII selling is almost out kept interest alive. Engro Foods closed on its upper limit, as decent fourth quarter results announced last week have led to an upward revision in street estimates,” said Elixir Securities’ analyst Muhammad Rawjani.

“Telecom stocks, trading a cumulative 80 million plus shares, stole the show, as 100% higher international call termination charges (in place since October 2012), and the likelihood of these revenues being reflected in upcoming earnings announcements, are expected to lead to a rebound in sector profitability,” commented Rawjani.

Telecard was the volume leader with 37.39 million shares gaining Rs0.78 to finish at Rs4.43. It was followed by Pakistan Telecommunication Company with 28.1 million shares gaining Rs0.95 to close at Rs19.39 and Pace Pakistan with 22.62 million shares climbing Rs0.37 to close at Rs3.48.

Foreign institutional investors were buyers of Rs170.17 million and sellers of Rs189.91 million worth of shares, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, February 5^th, 2013.

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