Market watch: Earnings excitement prevails as bourse climbs

Benchmark KSE-100 index gains 63 points.

KARACHI: Successful repayment of the latest loan instalment to the International Monetary Fund coupled with foreign interest in banking stocks, who are due to announce results this week, gave the market the confidence to close above the 17,600-point level.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index climbed 0.36% or 62.86 points to end at 17,611.40 point level. Trade volumes shrunk to 236 million shares compared with Monday’s tally of 278 million shares.

“After the news of repayment, stocks with dollar denominated revenues came into the limelight led by energy stocks, while the oil sector took a breather in its ongoing rally because the Oil and Gas Development Company witnessed foreign selling pressure,” reported Harris Batla, analyst at Elixir Securities.

Meanwhile, the banking sector supported the climb as MCB Bank, United Bank and the National Bank of Pakistan witnessed foreign interventions against expectations of announcement of healthy dividend payout, said Mujtaba Barakzai, analyst at JS Global Capital.

Shares of 381 companies were traded on Tuesday. At the end of the day 152 stocks closed higher, 171 declined while 58 remained unchanged. The value of shares traded during the day was Rs6.9 billion.

The textile industry which was due to benefit from rupee depreciation became victims of the doubt whirling around obtaining the general system of preferences plus (GSP plus) status from the European Union.

Habib Bank Limited through the announcement of good performance in 2012 motivated investors to reposition and stay committed to the sector for the long-term till the interest rate reverses back to upside.

Rumours of increasing margins of Pakistan State Oil by Rs0.5 to be discussed in the Economic Coordination Committee meeting due tomorrow and cash injection to avoid a devastating circular debt situation pushed the stock up 2%.

The cement sector remained a favourite with great results announcement by DG Khan Cement and Lucky Cement’s expansion plans and higher cement prices.

Fauji Cement was the volume leader with 36.01 million shares gaining Rs0.24 to finish at Rs8.21. It was followed by Maple Leaf Cement with 17.11 million shares losing Rs0.22 to close at Rs17.83 and TRG Pakistan with 17.06 million shares shedding Rs0.13 to close at Rs8.13.

Foreign institutional investors were net buyers of Rs203.7 million ($2.1 million), according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, February 13^th, 2013.

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