Market watch: Equities recover as investors gain heart

Local institutional activity buoys bourse to help it close green.

Our Correspondent June 25, 2013
The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained a modest 0.30% or 62.26 points to close at 21,110.34 point. PHOTO: AFP/FILE

KARACHI: Equities recovered after a massive drop on Monday, as investors keen to buy on dips started snapping up stocks with strong valuations.

“Pakistani equities staged a comeback, as local institutional buying helped recover some of their earlier losses,” reported Muhammad Raza Rawjani, analyst at Elixir Securities. “The day kicked off on a dull note, as declines in regional markets and recent losses at the local bourse kept participants cautious and confused [...] However, late buying mainly in oils, cements and telcos rejuvenated confidence,” he said.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained a modest 0.30% or 62.26 points to close at 21,110.34 point. Trade volumes plunged to 212 million shares, compared with Monday’s tally of 323 million shares. The value of shares traded during the day was Rs9.38 billion.

“The market recovered [...] led mainly by the Oil and Gas Development Company (OGDC), Pakistan State Oil (PSO), Pakistan Oilfields, and Pakistan Telecommunication Company.  Foreigners’ favourite MCB Bank fell by Rs11; if MCB’s decline were excluded, the market would have been up by 140 points,” reported Samar Iqbal, a senior equity dealer at Topline Securities.

Shares of 336 companies were traded on Tuesday. At the end of the day, 172 stocks closed higher, 123 declined, while 41 remained unchanged.

“PSO hit its circuit-breaker, as hopes of a solution to the circular debt issue were rekindled by news reports of the government finally paying Rs285bn in outstanding dues to independent power producers,” reported Ovais Ahsan, analyst at JS Global Capital. “The energy chain companies remained in a buoyant mode, as the premier chaired a meeting to review the country’s new energy policy,” he added.

Fauji Cement was the volume leader with 18.85 million shares, gaining Rs0.16 to finish at Rs13.41. It was followed by Pakistan Telecommunication Company with 17.76 million shares, gaining Rs0.95 to close at Rs21.00 and Maple Leaf Cement with 11.67 million shares, gaining Rs0.21 to close at Rs22.73.

Foreign institutional investors were buyers of Rs720.02 million and sellers of Rs765.70 million worth of securities.

Published in The Express Tribune, June 26th, 2013.

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