Market watch: 27,000-point barrier crossed ahead of earning season

Benchmark KSE-100 index rises 87.10 points.

KARACHI:

The stock market reacted positively to Friday’s unchanged monetary policy statement, closing with its highest on the first trading session of the week.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.32% or 87.10 points to end at 27,000.95.

“Stocks opened gap up, cheering Friday’s central bank’s decision to keep policy rate unchanged,” said Faisal Bilwani of Elixir Secutiries. “Strong positive vibes on feed gas rates for Engro Fertilizers (+5%) kept the recently listed fertiliser subsidiary and parent company Engro Corp (+4.75%) in the limelight with both closing in the upper price limit for the day.”



“The broader market did see a short-lived hiccup with profit-taking in index names dragging the index to the red, however, strong momentum and interest ahead of earnings season helped rebuild confidence. Trading activity followed the recent trend as small cap names led the volumes chart with cement sector continuing to shine.

“With the earnings season kicking off, pay-out stories will keep investor interest alive while we see small and mid caps to continue to offer fantastic day trade opportunities,” he said. “However, we feel a breather is in the offing and one can expect a 300-500 point’s correction this week.”

Meanwhile, JS Global Capital Analyst Ovais Ahsan said that Pakistan Petroleum (+0.8%) gained on strong foreign portfolio inflows in the second biggest oil and gas explorer in the country. Pakistan State Oil (+1.4%) gained on anticipation that an increase in dealer margins will emanate in this week’s Economic Coordination Committee meeting.



“Consumer stocks continued to put up a strong display with Nestle (+2.0%) and Murree Brewery (+5.0%) giving stellar performances.

“The banking sector was the obvious loser of the day reacting to the status quo on rates with United Bank Limited (-0.8%), National Bank of Pakistan (-1.2%) and Bank Al Habib Limited (-1.9%) ending up in the red zone,” Ahsan said.

Trade volumes fell to 266 million shares compared with Friday’s tally of 366 million.

Shares of 404 companies were traded on Monday. At the end of the day, 232 stocks closed higher, 156 declined while 16 remained unchanged. The value of shares traded during the day was Rs10.2 billion.

Fauji Cement was the volume leader with 19.0 million shares, gaining Rs0.37 to finish at Rs16.46. It was followed by Jahangir Siddiqui and Company with 13.6 million shares, gaining Rs0.12 to close at Rs12.17 and Pakistan International Airlines with 13.5 million shares, gaining Rs0.40 to close at Rs9.69.

Foreign institutional investors were net buyers of Rs406 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 21^st, 2014.

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