Market watch: Bourse continues climb despite strike

Fertiliser, telecom and cement sectors bolster gains.

Our Correspondent February 18, 2013
KSE benchmark 100-share index gained 0.38% or 68.39 points to end at 17,865.61 points.

KARACHI: Even as most of the city remained shut on Monday owing to a strike call, the Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 0.38% or 68.39 points to end at 17,865.61 points.

The rally was helped by positive news flows from multiple sources, prominent among which were expectations that the cement sector would record a surge in earnings due to stronger domestic sales, higher prices and lower input costs. Also featured was news that the Oil and Gas Development Company (OGDC) had signed direct agreements with fertiliser manufacturers for the supply of gas, and increased expectation that telecom companies will record higher revenues following Pakistan Telecommunication Company’s stellar profits on the back of higher international call termination rates.

Trade volumes remained flat at 292 million shares compared with Friday’s tally of 293 million shares. The value of shares traded during the day was Rs7.18 billion.

“Led by Engro and DG Khan Cement (DGKC), the Karachi bourse achieved a new high,” observed Samar Iqbal, equity dealer at Topline Securities. Both Engro and DGKC’s stocks closed at their upper price limits by the end of the day.

“The said agreement [between Engro and OGDC] will allow Engro to receive gas directly from gas fields, reviving financial prospects for its fertiliser business,” reported Sibtain Mustafa from Elixir Securities. “DGKC continued its positive momentum from last closing as news reports of a $45 billion deal between the Abu Dhabi Group and real estate tycoon Malik Riaz brought in fresh interest.”

Shares of 360 companies were traded on Monday. At the end of the day, 147 stocks closed higher, 161 declined while 52 remained unchanged. Pakistan Telecommunication Company was the volume leader with 29.23 million shares, gaining Rs0.82 to finish at Rs22.77. It was followed by Pace (Pakistan) with 26.60 million shares, gaining Rs0.39 to close at Rs4.32 and NIB Bank with 19.83 million shares, gaining Rs0.15 to close at Rs2.88.

“The majority of volumes were focused on third-tier stocks [...] as retail participation continues to rise. Furthermore, news of Ministry of Petroleum agreeing to increase POL margins by Rs0.25 per litre for motor spirit and Rs0.10 per litre for high-sulphur diesel brought interest in listed oil marketing companies near market end,” Mustafa added.

Foreign institutional investors were net buyers of Rs88.51 million worth of shares, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, February 19th, 2013.

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