Market watch: Bourse rebounds after Thursday’s correction

Benchmark KSE-100 index gains 120 points.

KARACHI: On Friday, the Karachi bourse rebounded after Thursday’s correction, which broke the 11-day upward streak. The rally was led by cement stocks with the energy sector playing a supporting role as investors expect the government to resolve the energy crisis on a priority basis.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 0.59% or 120.43 points to end at 20,537.03 point level. Trade volumes improved to 372 million shares compared with Thursday’s tally of 324 million shares.

“Foreign interest kept the activity going in the oil and gas, and banking sectors, while local investors preferred to accumulate cement stocks due to higher Public Sector Development Programme funding in the year,” reported JS Global Capital analyst Khalil Usmani.

Fauji Cement and DG Khan Cement rallied in anticipation of the government allocating a higher budget for development expenditures, said Samar Iqbal of Topline Securities.

Energy sectors remained in the limelight as investors believe that the new government’s first agenda will be to address the circular debt, which will result in better cash flows for either directly or indirectly related sectors.

Furthermore, Pakistan State Oil Company gained Rs9, with investors also hoping that resolution of circular debt will help the oil marketing company.

Shares of 373 companies were traded on Friday. At the end of the day 229 stocks closed higher, 104 declined while 40 remained unchanged. The value of shares traded during the day was Rs9.1 billion.

Bank of Punjab was the volume leader with 48.87 million shares gaining Rs0.25 to finish at Rs1.75. It was followed by Fauji Cement with 31.32 million shares gaining Rs0.26 to close at Rs10.73 and Lafarge Pakistan with 23.19 million shares rising Rs0.75 to close at Rs7.08.

Foreign institutional investors were net buyers of Rs551 million, according to data maintained by the National Clearing Company of Pakistan.

Despite the bullish streak, analysts expect the market to correct as they think the index is overbought. Going forward, the market will remain volatile on highs with selling to pull down the index to 21,000 levels.

Published in The Express Tribune, May 18^th, 2013.

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