“Bears are being kept on a tight leash, as foreigners’ buying and locals’ euphoria on hopes of progress on energy sector debt is keeping the mood upbeat, despite serious macroeconomic challenges,” says Bilwani. PHOTO: FILE
KARACHI: The Karachi Stock Exchange opened the week on a strong, positive note, with high levels of investor participation and optimism for the new government’s term ahead propelling the index to unprecedented highs.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 1.18% or 257.80 points to end at 22,080.85 points. Trade volumes fell to 573 million shares, compared with Friday’s tally of 647 million shares. The value of shares traded during the day was Rs11.74 billion.
“The oil and gas sector was amongst the pick of investors, with the Oil and Gas Development Company, Pakistan Petroleum and Pakistan State Oil closing up 3.1%, 1.7% and 1.2% respectively,” reported JS Global Capital analyst Veer Bajaj. “Bank of Punjab (rights issue) dominated the third-tier stocks as it came under selling pressure after three days of rallying.”
“Once again low-priced stocks remained speculators’ favourite, as the volume traded was abnormally high while value traded was close to Rs12 billion,” reported Samar Iqbal, senior manager of equity sales at Topline Securities. “The low inflation number [for the month of May] also helped investor sentiments,” she added.
“Low inflation reading at 5.13% year-on-year for May fuelled the already strong momentum ahead of the monetary policy [which is] due in the second week of June, wherein a rate cut would benefit yield plays, mainly power makers and oil stocks,” said Faisal Bilwani from Elixir Securities. “Reported foreigners’ buying in index names before close pushed stocks up,” he added.
Foreign institutional investors were net buyers of Rs132.97 million worth of securities, according to data maintained by the National Clearing Company of Pakistan Limited.
Bank of Punjab (rights issue) was the volume leader with 118.33 million shares, losing Rs0.86 to finish at Rs4.30. It was followed by Bank of Punjab (ordinary shares) with 38.54 million shares, losing Rs0.61 to close at Rs14.19 and Fauji Cement with 25.15 million shares, gaining Rs0.39 to close at Rs12.30.
“Bears are being kept on a tight leash, as foreigners’ buying and locals’ euphoria on hopes of progress on energy sector debt is keeping the mood upbeat, despite serious macroeconomic challenges,” Bilwani observed. “Small caps are likely to continue to churn high volumes, while illiquid consumer names and lagging plays will keep retail players busy.”
Published in The Express Tribune, June 4th, 2013.
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