KARACHI: The Karachi bourse rallied on Wednesday ahead of the budget speech with oil stocks driving the market up on Tuesday’s announcement by Finance Minister Ishaq Dar that circular debt will be eliminated in 60 days.
However, uncertainty prevailed in the market about tax measures as investors booked profits on every level.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 0.52% or 115.5 points to end at 22,324.57 points. Trade volumes climbed to 352 million shares compared with Tuesday’s tally of 268 million shares.
Shares of 387 companies were traded on Wednesday. At the end of the day, 195 stocks closed higher, 142 declined and 50 remained unchanged. The value of shares traded was Rs9.78 billion.
“Led by oil stocks, the market rallied 115 points after the government’s announcement of circular debt resolution,” reported Samar Iqbal, head of equity sales at Topline Securities.
“Uncertainty prevailed in the market due to the budget fillers by the government. Shaky sentiments about expected budget taxation measures gripped investors as they booked profit at various levels,” said Veer Bajaj, analyst at JS Global Capital.
Pakistan State Oil led the charge, hitting its upper limit, followed by sharp gains in index heavyweight Oil and Gas Development Company pushing the index north. Energy sector was in the limelight as resolution of the circular debt issue will significantly improve the sector’s cash flows.
Fertiliser, cement and FMCG sectors came under selling pressure as investors speculated that new tax measures in the upcoming budget could hurt their profitability, added Iqbal. The banking sector, which had been rallying for the last few sessions, also saw profit-taking.
Bank of Punjab (rights issue) was the volume leader with 46.62 million shares, falling Rs0.6 to finish at Rs2.65. It was followed by SilkBank with 21.07 million shares, gaining Rs0.2 to close at Rs2.6 and Fauji Cement with 16.89 million shares, losing Rs0.36 to close at Rs11.78.
Foreign institutional investors were net buyers of Rs29.93 million worth of shares, according to data maintained by the National Clearing Company of Pakistan.
Published in The Express Tribune, June 13th, 2013.
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