Market watch: Index recovers ground on flurry of good news

Banking sector rebounds; textiles, cements and telecom in the limelight.

KARACHI: Investor optimism was on an upswing on the second trading session of the week, helping the bourse cross over into greener pastures as domestic indicators provided positive triggers.

“Improved volumes, coupled with a recovery in the banking sector, helped the index gain some of the ground it lost yesterday,” observed Topline Securities’ Senior Manager for Equity Sales Samar Iqbal. “Furthermore, attractive cotton prices remained a key driver for the textile sector [...] as both closed at their upper caps. The telecom sector also remained in the limelight after a Sind High Court hearing [regarding the controversial International Clearing House] was deferred.”

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rebounded 1.15% or 201.37 points to end at the 17,693.37 points level. Trade volumes rose to 163 million shares, compared with Monday’s tally of 104 million shares. The value of shares traded during the day was Rs5.27 billion.

“With political parties appearing to make sincere efforts to agree on a mutually acceptable caretaker setup, sentiment on the local bourse changed for the better, leading to a rebound in the index and volumes,” commented Jawwad Aboobakar of Elixir Securities. Aboobakar added that cement stocks also witnessed increased activity as falling coal prices – an important raw material – and rising seasonal demand kept investors optimistic for upcoming profit announcements.

Shares of 354 companies were traded on Tuesday. At the end of the day, 192 stocks closed higher, 97 declined while 65 remained unchanged. TRG Pakistan was the volume leader with 15.88 million shares, gaining Rs0.51 to finish at Rs6.88. It was followed by Lotte Pakistan with 13.01 million shares, losing Rs0.16 to close at Rs7.76; and DG Khan Cement with 9.59 million shares, gaining Rs1.87 to close at Rs64.98.

“Among fertilisers, Engro closed up 3.3% on talks of better-than-expected fertilisers off-take numbers,” reported Mujtaba Barakzai from JS Global Capital. “Nishat Mills went up to its upper circuit, as the market continued to price in its equity portfolio, higher cotton prices and a potential EU trade deal which have boosted sentiment in the stock.”

Foreign institutional investors were net buyers of Rs403.26 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, March 20^th, 2013.

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