Market watch: Elections after-party shows no signs of abating

Index sees yet another day of intense buying activity.

KARACHI: A glut of foreign investor-led buying continued for the third trading day of the week, pulling the market to yet another high, just shy from the 21,500 points level.

“A smooth political transition and a more pro-industrial regime coming to power have brought in foreign institutional investment flows in excess of $180mn month-to-date, which has kept mood upbeat,” commented Elixir Securities analyst Sibtain Mustafa. “Cheaper valuations have always been the Karachi Stock Exchange’s unique selling point; however, the trigger [this month] was the completion of the first ever transition of power to a democratically-elected government – eyed by many as an impossibility in this part of the world,” he observed.



The Karachi Stock Exchange’s (KSE) benchmark 100-share index climbed 1.37% or 290.90 points to end at the 21,458.90 points level. Trade volumes shot to an unprecedented 572 million shares, compared with Tuesday’s tally of 444 million shares. The value of shares traded during the day was Rs15.32 billion.

Foreign institutional investors were net buyers of Rs370.79 million worth of securities, according to data maintained by the National Clearing Company of Pakistan Limited.

“After an abnormal foreign inflow the other day, the market continued its bull run with rising volumes,” reported Samar Iqbal from Topline Securities. “Once again, volumes crossed the Rs15.3 billion mark, led mainly by Pakistan State Oil, Pakistan Petroleum and Pakistan Telecommunication Company. Mid-cap stocks like Lotte Chemicals and Dewan Cement also witnessed renewed interest by retail investors,” she added.

“The visit of the Chinese prime minister also boosted investors’ sentiments,” Iqbal said.



Lotte Chemical was the volume leader with 63.15 million shares, gaining Rs0.85 to finish at Rs8.63. It was followed by Fauji Cement with 52.46 million shares, gaining Rs0.30 to close at Rs12.06; and Dewan Cement with 33.84 million shares, gaining Rs0.84 to close at Rs7.12.

“Oil stocks continued their rally, with Pakistan State Oil (up 5%) leading the charts,” reported Mustafa. “Pakistan Petroleum (up 4%) exchanged a whopping eight million shares, as foreign flows continue to hunt for growth and high-yield stocks.”

Published in The Express Tribune, May 23^rd,  2013.

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