Market watch: Bourse stays bullish on pre-election ride

Foreign inflow due to Unilever buyback helps KSE gain 192 points.

KARACHI: The bourse managed to extend its lead past the 19,000-point barrier ahead of the general elections due in ten days as investors accumulated positions on expectations of a pro-business environment after the elections. As usual, the market struggled for volumes as value stocks stayed on the radar of investors. Heavy foreign inflow into the market on account of Unilever Pakistan’s share buyback at Rs15,000 per share provided the much-needed boost to confidence.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 1.01% or 192.1 points to end at the 19,226.63 point level. Trade volumes fell to just 136 million shares compared with Thursday’s tally of 147 million shares.

“Concerns over depleting foreign reserves boosted the interest of the investors in dollar-denominated blue chips – oil and energy sectors,” reported Harris Batla, analyst at Elixir Securities.

Foreign exchange reserves decreased $173.6 million to reach $11.764 billion as of April 26 against $11.938 billion recorded in the previous week.

A new oil and gas discovery in Pakistan Petroleum-operated blocks pushed the stock to new highs, while banks and cement traded lacklustre, added Batla.

“Continuous foreign inflows due to buying by ex-Unilever Pakistan shareholders forced to take new positions also had a positive impact on the sentiments,” said Samar Iqbal of Topline Securities.

However, participation in terms of total volume stayed relatively low amid fear of law and order situation ahead of elections, reported JS Global Capital analyst Wasi Khan.

Shares of 391 companies were traded on Friday. At the end of the day 220 stocks closed higher, 129 declined while 42 remained unchanged. The value of shares traded during the day was Rs6.71 billion.

TRG Pakistan was the volume leader with 10.03 million shares falling Rs0.14 to finish at Rs10.04. It was followed by Fauji Cement with 9.42 million shares losing Rs0.13 to close at Rs8.97 and Lotte Chemical with 9.04 million shares climbing Rs0.29 to close at Rs7.7.

Foreign institutional investors were net buyers of Rs5.91 billion ($60.31 million), according to data maintained by the National Clearing Company of Pakistan.

With the quarterly result season over, analysts expect activity to remain low over concerns regarding the law and order situation; however value picks mainly financial and oil sectors will keep investors interested.

Published in The Express Tribune, May 4^th, 2013.

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