Market watch : Market rallies amid cooling political climate

Index gains 160 points in session marked by optimism for future.

KARACHI: The market continued to rally as the overall political scenario eases towards a transition of power, with investors taking renewed interest in the market.

“Continuous support from local and foreign fund managers kept the market up,” observed Samar Iqbal, head of equity sales at Topline Securities. “Renewed buying interest was seen in cement stocks amid hopes of better March quarter results, while heavyweights Oil and Gas Development Company and Engro Corp also remained on investors’ radars.”

“Renewed foreign interest in blue-chip stocks and institutional support on strong valuations ahead of the quarter end played a catalyst role in bullish sentiments,” added Arif Habib Corp analyst Ahsan Mehanti.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.90% or 159.65 points to end at the 17,913.62 points level. Trade volumes fell to 234 million shares, compared with Wednesday’s tally of 266 million shares. The value of shares traded during the day was Rs7.75 billion.

“Continued foreign interest has now set a new run in equities, while local investors still remain nervous over change in government,” commented analyst Sibtain Mustafa, who is associated with Elixir Securities. “Active foreign participation was visible today across all sectors, especially in bluechip stocks.”

“Local participation, on the other hand, was mostly in cements, textiles and independent power producers. With market momentum in their favour, day jobbers were active, as penny stocks [accounted for] a sizeable chunk of total volume.”

TRG Pakistan was the volume leader with 39.08 million shares, gaining Rs0.20 to finish at Rs7.28. It was followed by Fauji Cement with 34.60 million shares, gaining Rs0.18 to close at Rs8.40; and Lafarge Pakistan with 15.29 million shares, losing Rs0.05 to close at Rs6.54.

Foreign institutional investors were net buyers of Rs89.46 million, according to data maintained by the National Clearing Company of Pakistan Limited.

“We expect the market to remain strong, as direction will correlate strongly with the political process which stands at a critical juncture,” observed JS Global’s Ovais Ahsan. “A smooth political transition will win many brownie points with the foreign investing community and improve the country risk perception ,” he added.

Published in The Express Tribune, March 22^nd, 2013.

Like Business on Facebook to stay informed and join in the conversation.