KARACHI: The Karachi bourse’s 100-share index gained for the second successive day, this time led mainly by the banking and the cement sectors. Continuous interest of foreign investors in Pakistani equities resulted in across-the-board improvement in share prices.
The benchmark 100-share index had gained 48.5% in the fiscal year 2012-13 –from July 2, 2012 to June 28, 2013.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index climbed 1.59% or 355.5 points to end at 22,721.22 point level. Trade volumes grew marginally to 351 million shares, compared with Monday’s tally of 326 million shares.
Anticipation of rising inflation going forward and hike in interest rates generated institutional interest in the banking sector, while China’s pledged support solidified government’s commitments to build dams to resolve energy crisis propelled the cement stocks.
Investors waiting for a correction were left disappointed as banking giants, and the index in general, rebounded and surged, with the MCB Bank, National Bank of Pakistan and Habib Bank hitting their respective upper locks, reported Fareesa Baig, analyst at Elixir Securities. JS Global Capital analyst Veer Bajaj believes that the rebound is based on rumour of deduction in deposit rates by next week.
The cement sector rallied over intact underlying fundamentals following ambitious infrastructural agreements with China. Moreover according to reports, market chatter surrounding hike in cement prices also played a major role in propelling fortunes of the cement sector.
Engro Corporation, which has gained 27% in the last seven trading sessions, hit its upper circuit guided by inflows amid rumours pertaining to increased gas allocation to its new plant.
Pakistan two gas distributors – Sui Southern Gas Company and Sui Northern Gas Pipelines – also outpaced the index after the decision by the Oil and Gas Regulatory Authority to revise unaccounted for gas rate from 4.5% to 7%.
The value of shares traded during the day was Rs14.33 billion.
Lafarge Pakistan Cement was the volume leader with 21.67 million shares gaining Rs0.08 to finish at Rs9.87. It was followed by Fauji Cement with 21.54 million shares losing Rs0.06 to close at Rs14.49 and Karachi Electric Supply Company with 20.07 million shares falling Rs0.29 to close at Rs7.69.
Foreign institutional investors were net buyers of Rs693 million, according to data maintained by the National Clearing Company of Pakistan.
Published in The Express Tribune, July 10th, 2013.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.